About Pension Credit

There are two parts to Pension Credit– Guarantee Credit and Savings Credit. It is an income-related benefit.

Guarantee Credit will top up your weekly income if it comes in at less than £151.20 for individuals or £230.85 for couples.

Savings Credit is an extra payment given to people who have saved some money up towards their retirement, such as a pension.

You might not be eligible for savings credit if you have reached the age of State Pension on or after 6th April 2016.

You will not pay tax on Pension Credit.

How Do I Know If I Am Eligible?

Each element of Pension Credit has different eligibility requirements.

Guarantee Credit

In order for you to qualify for Guarantee Credit, you:

  • Have to live in Great Britain
  • Either you or partner has to have reached the age to qualify for Pension Credit

The qualifying age you need to reach for Pension Credit is slowly going up to 66. This is being done in line with the increase in the State Pension age for women who are 65 and the extra increase up to 66 for both men and women.

Savings Credit

In order for you to qualify for the extra add on of Savings Credit, either you or your partner have to be 65 or older.

You will be treated as couple if you live with your husband, wife or partner. It doesn’t matter if you are married or in a civil partnership or not.

[box]You will be unable to get Pension Credit if you decide to move abroad permanently[/box]

If You Will Reach State Pension Age On Or After 6th April 2016

The majority of people will not be eligible for Savings Credit.

There is a chance you may still get Savings Credit if you are part of a couple and one of you has reached the age of State Pension before 6th April 2016

How Is My Income Worked Out?

When you make your application, your income will be worked out. This will include:

  • Your State Pension
  • Any other pensions you have
  • the majority of social security benefits, such as Carer’s Allowance
  • Any savings or investments you have over £10,000. For these, £1 is counted for every £500 or part of £500 you have
  • Any earnings you get

If you are entitled to a private or workplace pension, the amount you would expect to get will then be calculated as income from the date you could have claimed it from, if you had done so.

There is no benefit to deferring your State Pension if you or your partner are on Pension Credit. You will not build up any extra State Pension or get a lump sum for deferring it. When working out if you are able to get Pension Credit, the income you would get from your State Pension is included, even if you aren’t claiming it.

The calculation will not include:

  • Attendance Allowance
  • Christmas Bonuses
  • Disability Living Allowance
  • Personal Independence Payment
  • Housing Benefit
  • Council Tax Reduction

If you are registered with Self Assessment, you have to tell the Pension Service how much you are expecting to pay in Income Tax for the current tax year, as it will affect how much Pension Credit you will receive.

What Will I Get?

[box]It is estimated you would be entitled to a Pension Credit payment of £151.20 per week if:

  • You were born on 1st January 1950
  • You had no savings
  • You are the only person living in your household.

The actual amount you receive may not be the same, it is worth checking using the Pension Credit calculator to check.[/box]

The way it works is like this:

  • Single People
    • Guarantee Credit per week- top up to £151.20
    • Savings Credit per week- up to £14.82
  • Couples
    • Guarantee Credit per week- top up to £230.85
    • Savings Credit per week- up to £17.43

There is a chance you will get more if you are a carer, are severely disabled or have some certain housing costs.

For the best estimate for your circumstance, you should use the Pension Credit calculator to help you work out how much you may be entitled to.

If you also use a benefits calculator, you may find that you are eligible for other benefits as well.

How Will I Be Paid?

Any sort of benefit, pension or allowance is paid into a account, such as a bank account.

What Should I Do If My Circumstances Change?

You have to get in touch with the Pension Services helpline if you find that your circumstances have changed as this may have an impact on how much you receive. An example would be if your income or capital increases or decreases.

You can also get face-to-face advice regarding your Pension Credit if you visit your local Service Information Point. You will need to make a booking for this.

What If I Have A Change During An Assessed Income Period?

An Assessment Income Period (sometimes referred to as AIPs) is a period of time when you are exempt from reporting changes to your pensions, savings or investments. If you have one, your Pensions Credit award letter will tell you so.

How Can I Claim Pension Credits?

The quickest way to make a claim is by phone. A friend or family member can make the call for you, but you must be with them when they make the call.

If you are unable to make a claim b phone, you can use a paper application. To do this, you will need to contact a voluntary organisation, such as Citizen’s Advice or AgeUK, in your local area. If you can’t do this or don’t have a local organisation like this, you can ask a friend or family member to call the helpline to request a paper application.

What Will I Need to Make A Claim?

You will to have these items to hand:

  • Your National Insurance Number
  • Details and information about your income, savings and investments
  • Your bank account details

You can only start your application 4 months before you will reach the qualifying age for Pension Credit.

You are able to make a claim any time after you have reached Pension Credit qualifying age, but remember your claim will only be backdated by 3 months.

Can I Appeal A Decision?

Yes if you wish to do so. You will have to appeal to the Social Security and Child Support Tribunal if you don’t agree with a decision. You have to usually ask for “mandatory reconsideration” before you can appeal.