Pension credit is a benefit which pays out thousands of pounds every year to those who are eligible – but hundreds of thousands of people still aren’t claiming it
Pensions credit matters – not only is it a source of extra cash in retirement, but it also unlocks other things including the winter fuel payment, free NHS dental treatment and you won’t have to pay for a TV licence.
But in some parts of the country more than two people in five that are eligible simply aren’t claiming the benefit, and even in the most savvy areas 29% of people are still missing out. Overall about 900,000 people who could claim the benefit simply aren’t.
That could be because it’s not automatic, you have to actively claim it, but it can be really beneficial to those who qualify for it.
Here we explain everything you need to know.
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What is pension credit?
Pension credit is a benefit available to some people who have reached the state pension age. It is for those who have a low income and it is a set amount of money to help them with the cost of everyday living.
The benefit is means tested, so it’s not available to everyone and the amount of money you get depends on your income and savings. If you are claiming pension credit you are also entitled to a range of other benefits, such as the winter fuel payment, lower council tax, and a discount on the cost of glasses.
How much is pension credit a week?
If you’re eligible for pension credit, it will top up your weekly income to £238 (or £363.25 if you’re in a couple).
You might be able to get an extra amount too in some cases. If you have a severe disability and receive one of the following benefits you could get an extra £86.05 a week, for example.
- Attendance allowance
- The middle or highest rate of the care component of disability living allowance (DLA)
- The daily living component of personal independence payment (PIP)
- Armed forces independence payment
- The daily living component of adult disability payment
- Pension age disability payment
- The middle or highest rate of the care component of Scottish adult disability living allowance
If you are a carer, you are looking after a child or children, or you have extra costs for things like housing you may be entitled to a higher amount too. There’s a full list on the Gov.uk website.
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Who is eligible for pension credit?
Pension credit is made up of two parts, guarantee credit and savings credit, and there are different eligibility rules for each part. If you have a partner who you live with you need to include their details (including their income and savings) when you make the application.
For the guarantee credit part you might be eligible if…
- You have a partner and you have both reached state pension age (currently 66 but set to rise to 67 by 2028)
- You have a partner, you’ve both reached state pension age and one of you receives housing benefit
- You have a weekly income of under £238 if you live alone or £363.25 if you have a partner.
When you calculate your income, this will include the money you receive from your state pension, any other pensions you have, a salary, and some benefits.
If you have £10,000 or less in savings and investments this doesn’t impact the amount you receive in pension credit. But if you have more than £10,000, every £500 over £10,000 counts as £1 income a week.
The savings credit element of pensions credit is currently being phased out so it’s only available to some people. To be eligible you will need to have been at state pension age before 6 April 2016.
There is a pensions credit calculator on the Gov.uk website which should tell you if you’re eligible and how much you may be able to claim.
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How to apply for pension credit
You can apply for pension credit online, by post or on the phone. You can only apply when you are four months from the state pension age, or any time after this – although payments can only be backdated by three months.
If you apply online, you will need to go to Gov.uk, you can also call 0800 99 1234 or you can apply by post if you download, print and fill out a pension credit claim form.
There’s a different system if you’ve living in Northern Ireland and you’ll need to apply at nidirect, on the phone by calling 0808 100 6165, or with a printed form.
You will need to give the following details when you apply for pension credit:
- National Insurance number
- Bank account details
- Details about your income, savings and investments
- The date you want to backdate your application to
How to claim pension credit
If you are eligible for pension credit, you will be contacted and told the amount of money you will start receiving. This will be paid into your bank or building society every four weeks as a lump sum.
If anything changes in your situation, such as if you start living with a partner who is under state pension age, you go into hospital or a care home, or you change your address or bank account, you will need to report this through the Pension Service helpline on 0800 731 0469.
The amount of money you receive could go up or down, depending on the change.
What other help can I get by claiming pension credit?
There are lots of other benefits you can claim when you start receiving pension credit. Some of these may be paid automatically but some you will need to apply for.
These can include:
- Winter fuel payment
- Warm home discount
- Housing benefit to help with rent
- Help with mortgage interest, ground rent and service charges
- Carer addition
- Severe disability addition
- Free or reduced council tax
- A free TV licence
- Free NHS dental treatment
- Free eye tests
- Discounts on prescription glasses and contact lenses
- Help with the cost of transport to hospital
