In the UK there are approximately 1.4 million retired individuals who are eligible to receive pension credit.
The purpose of pension credit is to give eligible pensioners some additional financial support to help cover the costs of daily living expenses.
Pension credit is a weekly benefit paid by the DWP to individuals and couples of state pension age who have a lower income.
In 2023 the government highlighted that a significant number of pensioners are not taking advantage of this valuable financial assistance.
Government estimations were that around 850,000 eligible households are not claiming pension credit totalling £1.7 billion of available pension credit going unclaimed.
In 2023 Martin Lewis of MoneySavingExpert, said:
“It’s a tragedy that up to a million low income pensioners who’ve paid into the system for years are missing out on what can be a crucial financial top up.
“And even those only due thruppence from it should still claim as Pension Credit is the key gateway benefit that opens the door to many other entitlements – including the remaining £600 cost of living support, council tax reductions, free TV licences (if age over 75) dental and optical support and more.”
Like so many types of benefits and tax reliefs if you don’t know they exist you could easily miss out on what you are entitled to.
This type of scenario is especially true for pensioners who may not be able to easily access information digitally or offline.
How much is pension credit worth?
The average amount granted through pension credit exceeds £3,500 annually, and it can also unlock access to additional benefits that help cover the costs of many different types of living costs.
From the start of the 2024/2025 tax year on 6 April 2024 the pension credit is increasing by 8.5% in line with earnings.
This means if you are above the state pension age (66) in the 2024-25 tax year and your weekly income falls below £218.15 pension credit can provide additional funds to reach that amount.
For eligible couples the combined income guarantee pension credit threshold is £332.95 per week.
Extra money is potentially available for people who are carers, severely disabled or have housing costs.
The pension credit calculator is an online tool that let’s you calculate how much pension credit you might be entitled to.
Savings credit
There is part of pension credit called ‘savings credit’ which is meant for those who reached the state pension age prior to 6th April 2016.
Savings Credit serves as an additional benefit for individuals with a moderate income or savings and you may qualify for both the savings and guarantee pension credits at the same time.
From 6 April 2024 if you are single the maximum amount you can receive from savings credit is £17.01 per week and for couples the maximum amount is £19.04 per week.
Pension credit essentials
There are a number of factors to review when finding out about your pension credit eligibility and we have list some of the most important one’s below:
- Pension credit does not affect your state pension entitlement or the amount of state pension you will receive.
- If you live with a partner you need to include their information in any pension credit application.
- You can backdate a pension credit claim for 3 qualifying months.
- You can make a claim up to 4 months before you are eligible to claim pension credit (before you become state pension age).
- You might be able to claim the guarantee credit and savings credit at the same time.
- Savings worth over £10,000 can affect how much pension credit you can receive. You will need to provide details relating to any investments or savings you have.
How to apply for pension credit
To apply for pension credit you will need the following documents and information for both yourself and your partner if you live with one:
- Your national insurance number.
- Details of your income, savings, and any investments.
- Your bank account details.
You can start your application for pension credit up to four months before reaching the state pension age.
If you are happy using the internet the most convenient way to apply is through .GOV.uk or you can call the pension service at 0800 99 1234 who can assist you in completing the application form over the phone.
For residents of Northern Ireland you should contact the Northern Ireland pension centre at 0808 100 6165.
If you are unable to apply online or over the phone you have the option to submit a paper PC1 application form which you can download online or request over the phone by calling 0800 99 1234.
Promote the pension credit message
The government knows that many pensioners are missing out on the financial support that pension credit gives and are trying to let as many people know as possible.
With the cost of living increasing significantly over the last few years the additional money the pension credit can provide could really help many struggling pensioners.
To help get the message out if you know a pensioner who may qualify for pension credit you should let them know so they can assess their eligibility.
