Pension credit explained: eligibility, calculator and how to apply

PENSION credit is a tax-free benefit that is designed to help with living costs.

We explain everything you need to know about eligibility and how to apply.

More than a million households are currently claiming pension credit but some are still missing out.

It is often described as a “gateway benefit” because even a small award can provide access to a wide range of other benefits.

This can include help with housing costs, council tax or heating bills and is in addition to the extra cost of living payments.

Around 1.4million pensioners receive pension credit, but 850,000 who could be eligible are not claiming this extra financial help.

We explain all about the benefit and how to check if you could be eligible.

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.

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

• £201.05 if you’re single
• £306.85 if you’re a couple.

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

You may be entitled to extra money if you have other responsibilities and outgoings.

The top-up and extra amounts are 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 £201.05 a week if you’re single and £306.85 a week for married couples.
• Savings credit – provides extra money if you’ve saved money towards retirement. You can get an extra £15.94 a week for a single person or £17.84 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 £61.88 a week or £72.31 per week for each child or young person you’re responsible for.

If you are disabled or care for someone who is disabled, you may get more.

For example, if you have a severe disability you could get an extra £76.40 a week or if you care for another adult you could get an extra £42.75 a week.

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

How much is pension credit per week?

Pension credit varies depending on your circumstances.

In addition to the above amounts you may also be entitled to more 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 £61.88 a week or £72.31 per week for each child or young person you’re responsible for.

If you are disabled or care for someone who is disabled, you may get more.

For example, if you have a severe disability you could get an extra £76.40 a week or if you care for another adult you could get an extra £42.75 a week.

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, Scotland or Wales.

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 credit under the old system it won’t stop unless your circumstances 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 the GOV.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 a full list of freebies available to pensioners, including those on pension credit.