With the cost of living crisis continuing to bite, people are keen to know more about what schemes are out there to help them out.
Pension credits entitle those who are eligible to thousands more per year. Paid directly into your bank account, like other benefits they are designed to aid those living on a lower income.
People entitled to Pension Credit can also claim council tax discounts, free dental treatment, housing benefit and much more – including the Winter Fuel Payment to help you pay your heating bills.
Pension credits are different from a state pension, so we’ve explained who can claim and how the government scheme works.
What are pension credits and are they means-tested?
Pension Credit is a means-tested income-related benefit for those over the State Pension age.
People can earn two different types of Pension Credit.
The first is Guarantee Credit, which tops up your weekly income if it’s below a certain amount.
The second is Savings Credit, which is an additional payment for those who have money saved towards retirement, in the form of a pension or similar.
If you’re single, you can get up to £218.15 of Guarantee Credit per week if you qualify and a potential additional Savings Credit of up to £17.01.
If you have a partner, Pension Credit will top up your joint weekly income to £332.95 and you can claim an additional £19.04 a week if eligible.
You do not pay tax on Pension Credit.
Carers, those who are severely disabled, responsible for a child or young person, or have certain housing costs may be able to claim more.
You can use the government’s online Pension Credit calculator to work out how much Pension Credit you could claim.
Who is entitled to pension credit in the UK?
To be eligible for pension credit, you must live in England, Scotland or Wales and be of State Pension age or older.
As State Pension age is worked out based on gender and date of birth, it differs between generations and is also regularly under review.
You can check your current State Pension age online here.
To further determine eligibility for Guarantee Credit, your income will be calculated based on whether you receive a state pension, other pensions, social security benefits, what your earnings are and what savings you have (if any).
If your income totals over £218.15 a week (if you’re single) or £332.95 (if you’re a couple) then you may not be entitled to pension credit in the UK.
You may still be eligible for pension credit if your income is lower than this, even if you have savings, a pension or your own home.
You can only receive Savings Credit if you (and your partner) reached State Pension age before 6 April 2016 and you saved some money for retirement — for example, a personal or workplace pension.
You might still get some Savings Credit even if you do not get the Guarantee Credit part of Pension Credit.
How to apply
You can apply for Pension Credit online via the government website.
You’ll need the following information about you and your partner (if you have one):
- National Insurance number
- Information about any income, savings and investments you have
- Information about your income, savings and investments on the date you want to backdate your application to
- Bank account details and, depending on how you apply, you may also be asked for your bank or building society name, sort code and account number
If you are unable to apply online, you can call the Pension Credit claim line on 0800 99 1234, or print and fill out a Pension Credit claim form to send via post.
You can start your application up to four months before you reach State Pension age and any time after you reach it.
However, your application can only be backdated by three months, meaning you can receive a maximum of three months’ worth of Pension Credit in your first payment.
Organisations like Citizens Advice or Age UK can offer help with your application should you need it.
For more information and advice on how to claim pension credit, you can visit the ‘How to Claim’ section on the gov.uk website.
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