Money Advice Service

Pension Credit provides additional retirement income if you are on a low income, but one in three of the people who are entitled to it don’t claim it. If you’re one of these, you’re missing out on hundreds of pounds a year. Read on to see if you’re eligible for Pension Credit.

What is Pension Credit?

Pension Credit is a benefit for people on lower incomes.

It has two parts:

  • Guarantee Credit
  • Savings Credit

Although only people who reached State Pension age before 6 April 2016 are eligible to claim the Savings Credit part of Pension Credit.

Even if you find out you are only entitled to a small amount of Pension Credit, it’s worth claiming it as it might help you qualify for other benefits, as well as providing some extra income.

Pension Credit – How much do you get?

The amounts shown below are for the 2018-19 tax year.

Guarantee Credit

Guarantee Credit tops up your weekly income to a guaranteed level of £163.00 if you’re single or £248.80 if you’re married or in a civil partnership.

Savings Credit

Savings Credit provides some extra money if you’ve made some provision towards your retirement by saving, or with a pension other than the basic State Pension.

The additional income provided by Savings Credit is up to:

  • £13.40 a week for a single person, and
  • £14.99 for married couples and civil partners.

However, you might not be eligible for this credit if you reach State Pension age on or after 6 April 2016.

For more information, visit GOV.UK.

Additional Pension Credit in special circumstances

You might get a higher amount of Pension Credit if:

  • you’re disabled
  • you have caring responsibilities, or
  • you’re responsible for paying certain housing costs, including mortgage interest payments.
Find out more by using the Pension Credit calculator on the GOV.UK website.

Pension Credit – Who can claim?

To claim Guarantee Credit you need to have reached the Pension Credit qualifying age.

This is the same as the State Pension age for women.

It depends on your date of birth and is gradually being increased.

You can use a simple calculator on the GOV.UK website to find out the age that applies to you.

To be eligible for Savings Credit, you must be aged 65 or over.

In general, you’ll only receive it if your income is above a threshold of £140.67 a week if you’re single or £223.82 if you’re married or in a civil partnership (2018-19 tax year).

The amount you’ll get will depend on the savings and income you already have.

You can claim Pension Credit regardless of whether you’re still working or have retired.

Use the State Pension calculator on the GOV.UK website to find out your State Pension age

When and how to apply for Pension Credit

You can apply up to four months before you want to start receiving Pension Credit.

The quickest way is to call the Pension Service Tel 0800 731 0469.

They’ll fill in the application form for you.

To apply for Pension Credit you will need to provide certain information.

This includes:

  • your bank account details
  • your National Insurance number
  • evidence of your income and your savings or investments.

What to do if your circumstances change

The amount of Pension Credit you get might change if your income, capital or other circumstances change.

If you’re 65 or over an assessed income period might apply.

If so you do not need to tell the Pension Service about every change in circumstances.

The letter sent to you with the Pension Credit decision will tell you if an assessed income period applies to you.

You’ll also have been sent an accompanying information sheet called “Pension Credit what you need to tell us about”.

It tells you about the changes you must report even if you do have an assessed income period.

If an assessed income period doesn’t apply you must tell the Pension Service immediately about any change in your circumstances that might affect how much Pension Credit you get for example, if you start work or if your savings go above £10,000.

That way, they can recalculate your Pension Credit entitlement and make sure you receive the right amount.

To notify the Pension Service of a change in circumstances, call them on Tel 0800 731 0469 and choose Option 1.

Universal Credit and changes to Pension Credit for new claimants

Universal Credit is being gradually introduced.

If you reach Pension Credit age and your partner is under Pension Credit age, you might not be able to claim Pension Credit.

Your partner might have to claim Universal Credit instead.

The date for this change has not yet been announced.

But if you are already claiming Pension Credit when the change comes in you won’t be affected (unless or until there is a break in your Pension Credit claim for some reason).

Don’t worry – you’ll be told about this change at the time you apply for Pension Credit.

This article is provided by the Money Advice Service.