What is Pension Credit? Who can get it?

Pension Credit is one of the most under-claimed benefits. Thousands of people are missing out.

According to the latest figures there’s £1.7 billion available in unclaimed Pension Credit and it’s estimated around 850,000 households are currently not claiming it when they could be.

Pension Credit can be worth thousands a year. Let’s have a look at what Pension Credit is and how you can get it.

What is Pension Credit?

It’s a benefit designed to help older people on low incomes with the cost of living. ‘Older’ means over your State Pension age, although you don’t have to be getting State Pension to claim it.

Pension Credit tops up your income to:

£218.15 a week if you’re single
£332.95 a week if you’re a couple

You don’t have to be married or in a civil partnership to count as a couple – you can simply be living with your partner.

And it’s possible you could get more if you have a disability, are on certain benefits or have caring responsibilities.

Who can claim?

You could qualify for Pension Credit if you’re 66 or over, and your total income is less than £200 a week. Pension Credit takes your income into account – but not everything counts as income.

What counts as income

State Pension
Any other workplace or personal pensions you have
Earnings from work (including if you’re self-employed)
Savings of more than £10,000 – every additional £500 counts as income of £1 a week or £52 a year (more about this later)
Most social security benefits such as Carer’s Allowance

What doesn’t count as income

Housing Benefit
Council Tax Reduction
Child Benefit
Attendance Allowance
Adult Disability Benefit
Personal Independence Payment
Christmas Bonus

Social fund payments, such as Winter Fuel Allowance and Cold Weather Payment

Pension Credit myths busted

Apparently lots of people don’t claim Pension Credit because they automatically assume they don’t qualify. Let’s bust some common myths about claiming Pension Credit.

I own my home – I can’t possibly qualify for Pension Credit

Not true. Pension Credit is based on your income. Owning your home doesn’t make any difference.

I’m still working - isn’t Pension Credit just for people on pensions?

No. It’s the total amount of your income that counts for Pension Credit, whether it’s earnings from employment, or pension.

I’ve heard having savings means you can’t claim Pension Credit

This isn’t true, either. Savings of £10,000 or less don’t affect your eligibility for Pension Credit. And we’ve already seen that if you’ve got savings of more than £10,000, every extra £500 counts as income of £1 a week.

So if you’ve got £12,000 in savings, the Pension Credit calculation counts this as income of £208 a year. Whether you qualify for Pension Credit depends on how much other income you have as well as this.

A gateway to other benefits

If you successfully claim Pension Credit it can open the door to other benefits, such as:

Housing Benefit if you rent your home
Support for Mortgage Interest if you own your home
a discount on your council tax
if you’re aged 75 or over, a free TV licence
help with NHS costs such as dental treatment, glasses and transport to and from hospital appointments
help with the cost of heating your home through the Warm Home Discount Scheme
if you move home, a discount on Royal Mail’s redirection service for your post.

It’s complicated – but worth it

As you can see, working out if you qualify for Pension Credit can be complicated. What’s more, there are two parts to Pension Credit: ‘Guarantee Credit’ and ‘Savings Credit’. You may qualify for one but not the other.

But, given how much Pension Credit is currently unclaimed, it’s worth at least finding out if you qualify. Before you start, you’ll need:

your National Insurance number
your bank or building society account details
details of all your income (earnings, benefits and pensions), and
any savings and investments you have.

If you’re part of a couple, you’ll need to have these details for your partner too.

You can check online, using the free Pension Credit calculator on the Government’s website.
Or, simply call the Pension Credit helpline on 0800 731 0469.

If you find out you qualify for Pension Credit, you can claim online or by calling the Pension Credit claim line on 0800 99 1234. They’ll be able to help you fill in the claim form.

It shouldn’t take long, and it could make you a little bit better off. In the current cost of living crisis, that’s worth a try.