Pension credit: who is eligible, calculator & how to apply explained (2024)

07/30/2024 06:24 AM

PENSION credit is a tax-free benefit for hard-up households and designed to top up your income to a minimum limit.

But recent figures reveal hundreds of thousands of households are missing out on the benefit.

Pension credit is described as a “gateway benefit” because it opens up a host of other perks.

This can include help with housing costs, council tax or heating bills and even a free TV licence if you are 75 or older.

Here is everything you need to know about the benefit, who is eligible and how to apply.

What is pension credit and Guaranteed pension credit?

Pension credit is a tax-free benefit designed to help with living costs if you are over the state pension age (66) and on a low income.

The weekly benefit comes in two parts – guarantee credit and savings credit – and is completely separate from your state pension.

You can claim pension credit if you have reached state pension age and your weekly income is less than:

• £218.15 if you're single
• £332.95 if you're a couple.

Pension credit tops up what you are currently getting to meet the above amounts.

You can also get extra money through the benefit if you have other responsibilities – this is known as guarantee credit.

How much is pension credit and guaranteed pension credit?

Pension credit will vary depending on what your current income is as it is designed to bring your weekly income up to the minimum amounts.

There are two parts to the benefit and pensioners can be eligible for one or both parts – here are the current rates:

• Guarantee credit –tops up your weekly income to a guaranteed minimum level. This is £218.15 a week if you’re single and £332.95 a week for married couples.
• Savings credit –provides extra money if you’ve saved money towards retirement. You can get an extra £17.01 a week for a single person or £19.04 a week for a married couple.

You may also get additional pension credit if you are disabled, have caring responsibilities or have to pay certain housing costs such as mortgage interest payments.

For instance, you can get either £66.29 a week or £76.79 per week for each child or young person you're responsible for.

If you have a severe disability you could get an extra £81.50 a week.

To find out how much you can get and if you’re eligible, use the calculator on theGOV.UK website.

Who is eligible for pension credit in the UK?

It is available for people who are over the state pension age, and who live in England,ScotlandorWales.

It used to be the case that couples, where one person was over state pension age, could claim, but new rules now mean that both people in a couple must be over retirement age to apply.

This means if you’re single and move in with a partner who is younger than the state pension age, you will stop being eligible.

But if you’re already receiving pension creditunder the old system it won’t stop unless your circ*mstances change.

How to apply for pension credit?

You can start your application up to four months before you reach state pension age.

Applications can be made on the government website or by ringing the pension credit claim line on 0800 99 1234.

You can get a friend or family member to ring for you, but you’ll need to be with them when they do.

You will need the following information to apply and if you have a partner you will also need the same details for them too:

• National Insurance number
• Information about any income, savings and investments you have
• Information about your income, savings and investments on the date you want to backdate your application to (usually 3 months ago or the date you reached state pension age)

If you claim after you reach pension age, you can backdate your claim for up to three months.

Pension credit calculator

To find out how much you can get and if you’re eligible, use the calculator on theGOV.UK website.

If you are eligible your benefits are typically paid into a bank account every four weeks.

You'll be asked for your bank, building society or credit union account details when you claim.

But if you have problems opening or managing an account, you might be able to claim a different way.

Here is afull list of freebiesavailable to pensioners, including those on pension credit.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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