Before this winter's cuts to the Winter Fuel Payment for pensioners were announced, Pension Credit had a pretty low profile. Now with this top up withdrawn for all but the poorest pensioners, Pension Credit has become a passport to extra support towards heating bills. But figures from Age UK show that more than a third of pensioner households who are entitled to this means-tested benefit aren't claiming it, which means they're missing out on an average of £41 a week and now up to £300 in Winter Fuel Payment.
If you are over State Pension age and struggling on a low income, it's easy to check if you are eligible for Pension Credit. Here's what you need to know...
What is Pension Credit?
Pension Credit is simply a weekly ‘top up’ benefit from the Government for people of state pension age who are on a low income.
Pension Credit gives you extra money to help with your living costs, as well as housing costs such as ground rent or service charges. It is means-tested, meaning that the amount you get depends on your individual circumstances. It is meant to ‘top up’ your weekly income to a guaranteed minimum level. If eligible, you could top up your income to at least £218.15 per week if you are single and £332.95 if you are in a couple.
When you apply, the Government takes into account your income, your pension, most benefits and any savings over £10,000. Your main home won’t be counted. Any payments made are tax free.
The average Pension Credit award is worth more than £3,900 a year, according to Government figures. And of course, it opens the door to other benefits, including Winter Fuel Payment and help with housing costs.
Are you missing out on Pension Credit?
As many as 8,800 pensioners are missing out on Pension Credit. Many simply don't know what is available, assume they are not entitled to help, are put off by the claims process (be warned, the form is long!) or are just reluctant to admit financial help is needed. Pension Credit is not triggered automatically, so you do have to put in a claim.
"We’ve estimated that up to 1.2 million people are missing out on the support they’re entitled to through Pension Credit," says Joanna Elson, CBE, chief executive at Independent Age, the national older people’s charity. "This adds up to more than £2.1 billion of Pension Credit alone that isn’t reaching people who need it most."
You’ll be eligible to apply if either you and your partner have both reached State Pension age, or one of you is getting Housing Benefit for people over State Pension age.
How much is Pension Credit worth?
Pension Credit is made up of two parts: Guarantee Credit and Savings Credit. You can claim one, or both parts. When you apply for Pension Credit your income is calculated. If you have a partner, both your incomes are calculated together.
Guarantee Credit tops up your weekly income to a guaranteed minimum level which is currently £218.15 for single people and £332.95 for a couple.
Savings Credit is paid as a ‘reward’ if you’ve saved for your retirement, for example through a pension scheme. However, you can only start claiming Savings Credit if you reached state pension age before 6th April 2016 or you have a partner who reached state pension age before this date and was already receiving it. It’s worth up to £17.01 a week for a single person and £19.04 for a couple.
Even if your weekly income is higher than these thresholds, you could still claim Guarantee Credit for other reasons, for instance, if you are a carer or have a severe disability. As with all Government credits and benefits, if your situation changes this can affect any entitlement and you should report any changes on the Government website.
Pension Credit Calculators
You can use the Pension Credit calculator on the Government website to see how much you could claim.
You may also be able to get more in certain circumstances, including if you’re a carer, have a severe disability, or are responsible for a child. You can find out more here.
Or use the benefits calculator at Turn2Us, Entitledto, or Betteroffcalculator.
The advice lines run by Age UK (0800 169 656565) and Citizens Advice (0800 144 8848) are also a good place to start if you prefer to speak to someone.
Pension Credit unlocks other benefits
Claiming Pension Credit means you can qualify for other payments and benefits, too.
*If you have housing costs, you could get extra help with ground rent if your property is a leasehold, for some service charges and charges for rents and site rents.
*You could also be eligible for Council Tax Reduction, or Housing Benefit if you rent the property you live in.
*The Winter Fuel Payment is only available to those on Pension Credit (or other means-tested benefit). Changes to eligibility rules came in on 16 September this year.
* It can help with some health costs. For instance, you’ll get free NHS dental treatment, and you can get help with the cost of glasses and transport to hospital.
Applying for Pension Credit
You can apply up to four months before you reach state pension age, and claim any time afterwards, although claims can only be backdated for three months.
When it comes to applying, you’ll need your National Insurance number to hand, along with details of all your income, pensions and savings and your bank account details.
If you live in England, Wales or Scotland you can apply online or by post, or by calling the Pension Credit Claim Line on 0800 99 1234.
If you live in Northern Ireland you can find details on how to apply here.
