Do pensioners get cost of living payment? Who is eligible for £300 from government - and when it will be paid

The cost of living crisis has been decimating household budgets this year, with inflation currently sitting at a 40-year high.

People have been squeezed by higher prices for everything from food to fuel, falling real-terms wages and pricier mortgages. Polling by More in Common has found 75% of people now consider the cost of living to be among their primary concerns, with a further 57% already cutting down on heating and electricity.

While working age people have been hit hard, those receiving state pensions have also seen a major shortfall in their incomes. In 2021, the Boris Johnson government froze the pension triple lock - a key Conservative Party manifesto pledge - meaning pensioners saw the state handout increase by just 3.1% in April 2022, well behind the rate of inflation seen this year.

The government has announced several cost of living support packages this year, including the energy bills grant that is currently rolling out. However, pensioners are not eligible for all of the support on offer.

So, can they claim the £650 cost of living support payment - the second installment of which is set to be paid out from 8 November? Here’s everything you need to know.

What is the cost of living payment?

Announced by the former Chancellor Rishi Sunak, the cost of living payment is a targeted financial support package. More than eight million households who receive benefits based on their incomes are set to receive £650 over two instalments, with the first £326 having arrived in July.

The second instalment of £324 is being paid out from Tuesday 8 November. The Department for Work and Pensions (DWP) has said the payment may take until 23 November to reach eligible bank accounts.

Claimants of these benefits are set to receive the support:

• Universal Credit
• Working Tax Credit
• Child Tax Credit
• Pension Credit
• Income-based Jobseekers Allowance
• Income-related Employment and Support Allowance
• Income Support

The DWP has warned some people receiving the cost of living payment might not get the money until the end of July.

Do pensioners get the cost of living payment?

Most people who receive the state pension will not be eligible for the cost of living payment. As stated above, the only pensioners who will get the government support are those receiving pension credit.

Pension credit is for people in England, Scotland and Wales who are over state pension age but need extra support for living costs, such as ground rent or service charges. People who have to care for a partner, or whose partner does not receive state pension but is reliant on benefits, can apply for this additional support.

While most pensioners are ineligible for this round of cost of living support, they will be getting their own bespoke aid alongside their regular Winter Fuel Payment in November and December 2022. A sum of £300 will be paid directly to pensioners in the same way that they receive their winter support.

All UK households are also receiving £400 between October 2022 and April 2023 to help them cover the cost of energy bills.

How has the cost of living crisis affected pensioners?

Due to the way the state pension is calculated, many elderly people are likely to have been struggling to keep up with inflation since April 2022 when the new rate came into force. Pensions rose 3.1% to £185.15 a week from 1 April, while inflation hit 9% in the same month. It has continued to increase ever since.

The benchmark for the benefit is taken in September, before being implemented the following April. So, as it stands, pensioners should receive a 10.1% (£18.70) uplift from April 2023 meaning they will get £203.85 a week.

However, the increase has been thrown into doubt after Liz Truss’s mini budget damaged an already fragile UK economy. It has left Rishi Sunak facing a major black hole in the public finances, which he appears set to attempt to fill with tax hikes and public spending cuts.