State pension reforms will result in a considerable drop in the number of people eligible for means-tested Pensions Credit in the coming decades.
Analysis from the Pensions Policy Institute said one of the key aims for the reforms was to reduce the reliance on means-tested benefits.
Its report warned high levels of reliance on means-tested benefits - and particularly on Pension Credit, which provides basic income - risk undermining the policy of auto-enrolment if individuals perceive that being eligible for means-tested benefits means they would not gain significantly from saving in a pension.
The report said: "By setting the illustrative level of the proposed single-tier state pension above the level of the Guarantee Credit element of Pension Credit, and removing the Savings Credit element of the benefit for individuals reaching state pension age after the single-tier pension has been introduced, the proportion of people over state pension age eligible for Pension Credit is likely to be significantly reduced."
The Department for Work and Pensions (DWP) estimates that under the current system, eligibility for Pension Credit among the single-tier population is expected to peak at between 15% and 20% in the mid-2020s and fall to around 10% by 2060.
Under the single tier, eligibility for Pension Credit is halved compared to the current system in the first few years of reform, and ultimately falls to about 5% cent by 2060.
However, the PPI added a number of pensioners will still remain eligible for Pension Credit because of different reasons, such as having less than the 35 years necessary to qualify for the full single-tier pension or because of having a disability or caring responsibilities.
It is expected eligibility for Housing Benefit (HB) and Council Tax Support (CTS) is not expected to change significantly after the implementation of the single-tier pension.
"This is because even though some pensioners will have higher income after the implementation of the single-tier pension, it will still take more additional income to lose HB and CTS entitlement," the PPI said.
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