Pension Credit: what it is, eligible age, what it pays and how to claim

Pension Credit: what it is, eligible age, what it pays and how to claim

Many retirees could get a vital financial boost with Pension Credit but don't realise they are eligible. We reveal how it works, who can get it and how to claim.

lovemoney staff

Investing and pensions

lovemoney staff
Updated on 12 December 2022

Pension Credit: time running out to claim vital help

Almost a million pensioners have just days left to avoid missing out on a vital payout worth hundreds of pounds.

Earlier this year, the Government announced it would make a series of cost-of-living payments to households in receipt of certain benefits or tax credits to help keep on top of soaring bills.

Among those who qualify are households claiming Pension Credit.

However, Government stats from June found that there were as many as 850,000 retirees who we eligible but had yet to apply.

This means they are missing out not only on the value of the Credit itself – up to £3,300 a year depending on individual circumstances – but also on the additional cost of living top-ups.

And the clock is ticking if these households want to bag the most recent instalment, which is worth £324.

Apply for Pension Credit before December 18

An important thing to note about Pension Credit is that it can be backdated by three months upon a successful application. 

That's important, as it means you would still be eligible for the last cost of living payment - provided you act this week.

As the Department for Work and Pensions highlights here: "To ensure that a successful backdated claim falls within the qualifying period for the extra £324 cost of living help, eligible pensioners are being urged to claim Pension Credit as soon as possible, and by no later than 18 December 2022."

Why do so many miss out on Pension Credit?

Given the huge sums of money available, it's staggering that hundreds of thousands of eligible households are still missing out.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, believes this is because many don't even know Pension Credit exists, or mistakenly believe they can't claim it.

"Pension Credit tops up the income of the poorest pensioners and acts as a valuable gateway to other support such as help with council tax and NHS costs," she explains. 

"Claimants aged 75 and above can also get a free TV licence.

"This year, Pension Credit claimants have also been able to claim extra cost of living payments from the government with a £324 payment being paid recently and a further £900 due to be paid in instalments next year.

"Such support can make a huge difference and yet Pension Credit remains massively underclaimed.

"There are several reasons for this. People don’t realise you can claim if you own your own home or if you have savings for instance.

"However, the deadline to submit a successful claim for Pension Credit and qualify for the £324 cost of living payment is looming and it is vital that as many people as possible claim."

In this article, we'll explain everything you need to know about Pension Credit, including who is eligible, how much it's worth and how to claim.

What is Pension Credit?

Pension Credit is an income-related benefit that can boost your State Pension.

It’s made up of two parts: Guarantee Credit and Savings Credit.

Guarantee Credit is a weekly payment that you can get to top-up your income to a minimum level.

Savings Credit is a top-up for those that have saved some money towards their retirement, for example in a pension.

How much the State Pension is worth now

How much can you get?

Guarantee Credit tops up your income to £182.60 a week if you’re single or £278.70 if you’re in a couple.

Savings Credit pays up to £14.48 extra a week if you’re single or £16.20 a week if you’re in a couple.

You can use the Government’s Pension Credit calculator to work out how much you could get.

You are treated as a couple if you live with your husband, wife or partner – but you don’t have to be married or in a civil partnership.

Since last May, a change in rules means a couple can only claim if both of them have reached State Pension age.

If one partner has reached State Pension age and is claiming Housing Benefit for a couple, they may be able to claim for Pension Credit.

Who is eligible for Pension Credit and Savings Credit?

Depending on your circumstances, you may be eligible for one or both parts of Pension Credit.

Pension Credit is available if you live in Great Britain and you and your partner have reached the qualifying age of 66.

You can use this calculator to check what your qualifying age is.

To be eligible for Guarantee Credit, your weekly income must be less than £182.60 if you're single or £278.70 for couples.

You may be able to claim even if your weekly income is higher if you have a severe disability, you are a carer or have to pay housing costs such as a mortgage. Learn more here.

Savings Credit is only available to people that reached State Pension age before 6 April 2016.

If you are entitled to Pension Credit, you may also be eligible for other benefits. So, even if you are only eligible for a small amount of Pension Credit, it’s worth claiming to potentially get access to other help.

Use a benefits calculator to figure out what else you can get.

When can you claim?

The earliest you can apply for Pension Credit is four months before you reach the qualifying age.

You can also claim any time after you reach Pension State age, but your claim can only be backdated for three months.

How to claim Pension Credit

In order to get Pension Credit, you need to make a claim for it.

You can read all your options for making a claim on this Government page, but probably the quickest way to do this is by calling the Pension Credit claim line on 0800 99 1234 (textphone: 0800 169 0133). 

It’s open Monday to Friday, 8am to 7:30pm.

An agent will fill in the application for you over the phone.

If you don’t want to make a claim by phone, you can request a paper application.

You will need your National Insurance number, information about your income, pensions, savings and investments plus your bank account details to make a claim.

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