What is pension credit, and how do you claim it?
Pension credit has been thrust into the spotlight since claiming it is now one of the main ways to qualify for the winter fuel payment.
The benefit is for low income retiree households, providing a weekly top-up to help with everyday spending – as well as acting as a sort of “gateway” to other perks.
It’s estimated that hundreds of thousands of pensioners in Britain are eligible for pension credit, but don’t currently claim it.
Here, Telegraph Money explains who is eligible to claim pension credit, how to do it, and how much you’ll receive.
What is pension credit?
Pension credit is a means-tested benefit for those above state pension age with a low income. It tops up your income to help with everyday living costs, providing an average income boost of around £3,900 per year.
However government figures published last year showed approximately 850,000 pensioners who are eligible for pension credit were not claiming it – roughly one in three.
In a bid to increase take-up the Department of Work and Pensions has launched a campaign to raise awareness of the benefit and who can claim it.
Who is eligible to claim?
To qualify for pension credit, the following must apply:
Be above state pension age, which is currently 66. For those who are not British, you will need to have settled or pre-settled status under the EU Settlement Scheme.
Have a weekly income of up to £218, if you are single, or up to £332 a week if you are in a couple and both above state pension age.
Have savings of less than £10,000. You can still claim pension credit if you have more than £10,000, but you will receive a lower amount.
Those with disabilities or who are carers may still qualify for pension credit even if you have a higher income. To see whether you qualify, you can use the Government’s pension credit calculator.
You’ll need details of your earnings, benefits and pensions, as well as your savings and investments.
How much can you get?
The amount you get from pension credit will vary depending on whether you’re eligible to receive one or both of the elements that make up the benefit; guarantee credit and savings credit.
Guarantee credit is additional income on top of the state pension you receive to a guaranteed minimum level. If you are single, guarantee credit will top up your weekly income to £218.15. If you are part of a couple the additional payment will take your joint weekly income to £332.95.
Savings credit operates slightly differently. This is extra money available if you reached state pension age before 6 April 2016, and saved some money for retirement – such as in a savings account or private pension.
The maximum you receive as a single person claiming savings credit is £17.01 a week, and the maximum for a couple is £19.04.
There is also money available if you care for someone. A so-called carer addition can be worth up to £45.60 a week.
For those with a disability you could be eligible for a severe disability addition, which is worth up to £81.50 a week.
How do I make a claim?
To claim pension credit you can apply online via the government website.
Note that the following rules apply when it comes to making a claim:
The earliest you can apply is four months before you’re due to start receiving state pension payments. You can apply any time after receiving state pension payments, but note that pension credit payments can only be backdated for up to three months, so you miss out on payments you would have been eligible for at an earlier date.
Like the state pension you are not automatically enrolled into pension credit, so you must make a claim in order to receive the retirement benefits.
You can also call the pension credit claim line on 0800 99 1234 and the team will fill out an application for you over the phone. A friend or family member can call for you if you are unable to use a phone. Or you can apply by post. You need to print out and fill in a Pension Credit claim form that can be found online or you can call to request one.
This can then be sent by freepost, so doesn’t require a stamp, to: Freepost, DWP Pensions Service 3.
In order to apply you will need your National Insurance number and information on your income, savings and investments.
What other benefits can you get when you claim pension credit?
Claiming pension credit means you’ll also be eligible to receive several other grants and savings, which are all deemed beneficial for older people with low incomes. These include:
Winter fuel payments
Recipients of pension credit will still be eligible for the winter fuel payment, while those who only receive the state pension will no longer get this financial help with energy costs. Eligible pensioners will receive up to £300. However, as the payment is only once a year you will need to submit your pension credit application far enough ahead to ensure you receive the benefit.
The last day to make a claim for back dated pension credit and the associated benefits is 21 December and the qualifying week in 2024 for Winter Fuel Payments will be from 16 to 22 September.
Free TV licence for over-75s
Receiving pension credit may also mean you don’t have to pay a TV licence fee, saving £169.50 this year. If you or someone in your household is over 74 and receives pension credit then you can apply for a free TV licence.
Some broadband providers also offer discounts on internet services for those receiving pension credit, but this will vary.
Free insulation and boiler grants
Both private tenants and homeowners who receive pension credit could be eligible for a grant to help replace a broken or ineffective boiler.
Energy companies operating under the Energy Company Obligation scheme are required to provide funding for eligible households for energy efficiency improvements in a bid to reduce fuel poverty.
Reduced medical expenses
Pensioners who receive pension credit may also be eligible for free dental care, contributions to the cost of new glasses and help with transport to hospital. And if you or your partner receive pension credit you may also be entitled to free NHS prescriptions.
Reduced council tax
If you are a pensioner receiving guarantee credit you may get your council tax reduced or even paid in full. If you only receive savings credit you may still be able to receive a discount if you have less than £16,000 in savings.
Housing benefit
If you have reached state pension age and are struggling with your housing costs – mortgage payments or rent – you may be able to receive housing benefits to help make up the shortfall.