Pension credit eligibility explained

Pension credit is a tax-free financial benefit for pensioners who are on a low income. However, many people are unaware of pension credit and don’t realise they’re eligible to claim it. For example, in 2017/18, just six out of 10 eligible people claimed pension credit, with around £2.5 billion going unclaimed. On this page, you’ll find out more about pension credit entitlement, who can claim pension credit and how to claim.

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The rundown
  • Pension credit is a tax-free benefit aimed at pensioners who are over state pension age and are on a low income
  • Pension credit has two parts; guarantee credit and savings credit
  • To qualify for pension credit, you must be living in the UK and have reached state pension age, which is currently 66 for both men and women

What is pension credit?

Pension credit is an additional benefit you may be able to claim on top of your state pension if you have retired and are over pension age. It’s available for all pensioners who meet the pension credit criteria (more on that below), regardless of whether you’re single, widowed, or in a couple. More than three million households are eligible for pension credit, but only a third claim it. 

Pension credit has two parts; guarantee credit and savings credit. In a nutshell, guarantee credit is for pensioners on a low income, while savings credit is a benefit you can claim if you’ve saved for your retirement.

What is guarantee credit?

Guarantee credit tops up your income to a level set by the government. If you’re single and your weekly income is below £173.75, your pension credit will top you up to this amount. If you’re a couple and your joint income is below £265.20 per week, you’ll get a top-up to bring your combined income to this amount.

What is savings credit?

Savings credit offers extra money if you’ve saved for your retirement. It enables you to claim up to an extra £13.97 if you’re single and £15.62 if you’re married or have a partner. However, you can’t claim savings credit if you reached the state pension age on or after the 6th April 2016.

How much can I get in pension credit?

The amount you may be able to claim in pension credit will depend on the following:

  • Your current income
  • How much you’ve saved or invested
  • If you’re a couple, the value of your combined income and savings

Based on those factors, you’ll top-up to one of the above amounts under guarantee credit or savings credit. Even if you find it’s only a small amount, you may still want to claim it because it might help you qualify for other benefits as well as providing a little additional income. The extra benefits you may be entitled to by claiming pension credit include:

  • Free TV licence (for over 75s)
  • Council tax reduction
  • Warm home discount
  • Housing benefit
  • Cold weather payments
  • Free home insulation and boiler grants
  • Free dental treatments 
  • Vouchers for glasses/contact lenses 

You can calculate how much pension credit you could receive by using the government’s online calculator

Who is eligible for pension credit?

To be eligible for pension credit, you must be living in the UK and have reached the state pension age (currently 66 for both men and women). As a couple, you may only claim your pension credit if both partners have reached the state pension age. Even if you own a home, you may still be eligible.

When claiming guarantee credit, if you’re at an eligible age but your weekly income is higher than the threshold mentioned above, you may still be eligible to claim if you meet any of the following criteria:

  • You have a severe disability
  • You are currently a carer
  • You still have to pay housing costs, such as a mortgage 

Only people who reached the state pension age before the 6th April 2016 are eligible for savings credit. However, if you’re a couple and one of you reached the state pension age before the 6th April 2016, you may still be able to claim. It’s important to note that if you have savings over £10,000, it might affect the amount you will receive in pension credit.

How do I claim pension credit?

The easiest way to claim pension credit is to call the Pension Credit claim line on 0800 99 1234. They can fill a pension credit application on your behalf. You’ll need to prepare some information to make the process quicker, and it helps to have the following to hand:

  • Your National Insurance number
  • Bank account details
  • Information that indicates your income, savings or any investments
  • Pension information, if you have one
  • Housing costs, such as mortgages, interest payments and service charges
  • If you’re a couple, you’ll both need to provide your details

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