Minister for Pensions Laura Trott stated, “Up to an estimated 850,000 eligible households are not claiming Pension Credit, with up to £1.7 billion of available Pension Credit going unclaimed.” Department of Work and Pensions press release June 2023.
The average Pension Credit is worth over £3,500 per year and it may mean you can get access to other benefits.
What is Pension Credit?
Pension credit is a means-tested government benefit. It helps you with daily living costs if you’re over State pension age and on a low income.
It is separate from your State Pension.
Eligibility for Pension Credit
Currently, almost 1.4 million pensioners in Britain are in receipt of Pension Credit Source: DWP Press release, June 2023
Are you eligible to claim? To be eligible you must live in Great Britain. Northern Ireland has a separate process for assessing eligibility.
You must have reached the State Pension age.
Finally, you must include your partner, if you have one, on your application for Pension Credit.
Means Testing for Pension Credit
When you send your application in for Pension Credit, the assessors calculate your income. If you have a partner, the assessors calculate your joint income.
What Does The Government Classify as Income?
- State Pension
- If you have deferred your State Pension, the State Pension you would get is classed as income.
- Any other pensions you may are claiming. If you are eligible to claim a personal or workplace pension but have not claimed it yet, the amount you would expect to get is included as income.
- Income from employment or self-employment
- Most, but not all, social security benefits are classed as income. See below for details on what is excluded.
What Does The Government Not Classify as income?
Not all social security benefits are included as income. For example, the following are excluded:
- Adult Disability Payment
- Attendance Allowance
- Christmas Bonus
- Child Benefit
- Disability Living Allowance
- Personal Independence Payment
- social fund payments like Winter Fuel Allowance
- Housing Benefit
- Council Tax Reduction
Source: Gov.UK
Your Savings and Investments
If you have more than £10k in savings and investment, every £500 above the £10k counts as £1 income per week.
As an example, if you have £12k savings, it counts as £4 per week.
Pension Credit – What You Could Claim
There are two parts to the Pension Credit, Guarantee Credit and Savings Credit.
Guarantee Credit
For the tax year 2023/2024, this tops up your weekly income to a minimum:
- £201.05 for a single person.
- £306.85 for couples.
Furthermore, you may also get an extra:
- £74.60 if you have a severe disability.
- £42.75 if you care for another adult.
- £61.88 a week for each child or young person who is under 20, lives with you and that you are responsible for. If the child was born after 6 April 2017, the amount increases to £72.31. There may be further assistance if your child or young person is disabled.
Additionally, you could also get extra support with:
- housing costs e.g., some service charges, if you rent or even if you own your property.
- NHS costs such as prescription costs, eye tests and/or dental treatment.
Savings Credit
This benefit payment adds £15.94 per week to your income if you are single and £17.84 if you’re a couple.
To be eligible you:
- must have reached State Pension Age before 6 April 2016
- have retirement money from either a personal or workplace pension.
Once you get Pension Credit, another benefit is that you will automatically get cold weather payments. Note that this is different from the Winter Fuel Payments.
Use the Pension Credit Calculator to Check Your Eligibility
You can check if you are eligible here.
How The Government Pays You
The government pays the money into your bank account.
How To Claim Pension Credit
You can start your application for Pension Credit up to 4 months before you reach the pension Credit qualifying age which is State Pension Age.
Furthermore, you can also apply after you reach State Pension age but any payments due to you can only be backdated three months.
Therefore, your first payment would include those 3 months of Pension Credit if you were eligible during that time.
Ways to Apply for Pension Credit
You can apply:
- by phone:
- Pension Credit claim line
Telephone: 0800 99 1234
Textphone: 0800 169 0133
Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 99 1234
- Pension Credit claim line
- by post: Print out and complete the claim form and post to
- The Pension Service 8
Post Handling Site B
Wolverhampton
WV99 1AN
- The Pension Service 8
It’s Only By Applying That You’ll Know Whether You Qualify for Pension Credit
Pension Credit can help you with your day-to-day living costs.
As stated previously, there is almost £1.7 billion of Pension Credit going unclaimed. If you are of State Pension Age you should apply to see if you can claim this government payment. If you know someone of State Pension age who may qualify, share this blog post with them.
The Pension Credit is means tested but it’s only by applying that you’ll know if you qualify.
Finally, if you want further information and an overall Guide to Pensions in the UK read here.
Thanks for reading!
If you have any comment to make or any experience to share about Pension Credit, please do so In the Comments section below.
DISCLAIMER: Inquisitive Finance operates on principles of exchange of knowledge, ideas and opinions and learning in the community. Your decisions are entirely your own responsibility, and I am in no way responsible for your actions. I am not a financial advisor. Whilst I strive to provide accurate and up-to-date information, I make no warranties or representations as to the accuracy or completeness of this information. Use common sense, do due diligence and where necessary, use the services of a licensed financial advisor, before making any financial decision and/or transaction.
