What is Pension Credit?
Pension Credit is a means-tested benefit that tops up your basic state pension if you have a low income.
There are two parts to Pension Credit.
- Guarantee Credit is available to pensioners on low incomes. It tops up weekly income to a guaranteed minimum level set by the government.
- Savings Credit is an extra payment available if you saved some money towards your retirement, for example, with a pension. It’s only paid if you were getting savings credit until 6 April 2016 and if you’re a couple and one of you reached State Pension age before 6 April 2016.
How much is Pension Credit?
Guarantee Credit (2020-21) tops up your income to:
£173.75 a week
for a single person
£265.20 a week
for a couple.
Savings Credit (2019-20) can be up to:
£13.97 a week
for a single person and
£15.62 a week
for a couple.
Read more about how Pension Credit works with State Pension on Which? Money.
What is the Pension Credit calculator?
Gov.uk has a Pension Credit calculator to help you find out if you’re eligible for Pension Credit and how much you could get. For example, to qualify:
- you (or your partner) must have reached pension qualifying age. The minimum age for guarantee credit is based on the current State Pension age for women. If you need to find out when you’ll reach pensionable age, go to Which? Money to use the State Pension age calculator.
- while there is no savings limit for Guarantee Credit, if you have more than £10,000, this will affect the amount you receive.
- you must live in Great Britain.
How do I claim Pension Credit?
You can apply for Pension Credit by filling in the PC1 form:
Gov.uk (Pension Credit)
An overview, what you'll get, eligibility and how to claim.
Appealing against a claim decision for Pension Credit
If you apply for Pension Credit and don’t agree with the decision you receive, you may be entitled to appeal against it – this is also known as ‘mandatory reconsideration’. See our article on appealing against a benefits decision for more advice on how to appeal.
What do I need to know about Pension Credit?
- Pension Credit is an income-based benefit, so your income and savings are taken into account.
- Pension Credit can be helpful to top up your income if you receive Carer’s Allowance or disability benefits.
- You don’t pay tax on Pension Credit.
- Following changes to the rules in May 2019, couples are only eligible for Guarantee Credit once both people have reached state pension age. If only one person in a couple has reached pension age, they will need to apply for Universal Credit, until both of them have reached pension age. If you were already receiving Pension Credit before 15 May 2019 and you are in a couple, then you can continue to claim the benefit regardless of your partner’s age.
- If you have high housing costs, such as service charges, ground rents or mortgage interest payments, you could receive extra to help cover those.
- It’s worth claiming Pension Credit even if you’re only entitled to a few pounds. Receiving Pension Credit guarantee credit means that you’re also eligible for Housing Benefit and council tax reduction.
- The amount of Pension Credit you’re entitled to may differ if your circumstances change significantly after you begin claiming. If you’re a carer, you could get an additional £37.50 per week (2020-21) with the Carer Addition.
- If you’re providing care for someone on severe disability premiums, they could get £66.95 per week (2020-21) with the Severe Disability Addition.
- If you receive the Guarantee Credit element of Pension Credit you may be entitled to Warm Home Discount – a payment of £140 to help those struggling to pay their energy bills during winter. Find out more in the Which? Home & garden article about Warm Home Discount.
Find out about the State Pension, including information on State Pension age and how much you’ll receive.
Read about the benefits available in later life: Attendance Allowance, PIP, Winter Fuel Payment and more.
From reviewing your pension options to making a will, here’s how to put a financial plan in place for later life.