What is Pension Credit?
Pension Credit is a means-tested benefit that tops up your state pension if you have a low income.
There are two parts to Pension Credit: Guarantee Credit and Savings Credit.
Guarantee Credit is a benefit available to people over state pension age who are on a low income. It tops up weekly income to a guaranteed minimum level set by the government.
If your income is less than the Guarantee Credit amount and you meet the qualifying conditions, you may qualify for this benefit.
This form of Pension Credit is available if you have saved some money towards your retirement, for example, with a pension. It can be paid as well as Guarantee Credit or on its own.
Savings Credit is only available if you (and your partner, if you have one) reached state pension age before 6 April 2016. If you are receiving it already, it will continue for as long as you remain eligible.
Pension Credit isn’t taxable.
How much is Pension Credit?
In 2020-21 Guarantee Credit tops up your income to:
£173.75 a week
for a single person
£265.20 a week
for a couple.
Savings Credit can be up to:
£13.97 a week
for a single person and
£15.62 a week
for a couple.
Additional Pension Credit benefits
Depending on your circumstances, there are some additional allowances that may be added to your Guarantee Credit entitlement.
- If you’re a carer and are entitled to Carer’s Allowance, you could get an additional £37.50 per week (2020-21) with the Carer Addition.
- If you’re severely disabled and eligible for disability benefits, you could get an additional £66.95 per week (2020-21) with the Severe Disability Addition.
- If you’re responsible for a child or you have to pay housing costs, you may also be eligible for a higher amount.
- You may also be entitled to Warm Home Discount – a payment of £140 to help those struggling to pay their energy bills during winter.
It’s worth claiming Pension Credit even if you’re only entitled to a few pounds. This is because it can help you to qualify for other benefits.
For example, receiving Guarantee Credit means that you can apply for pension-age Housing Benefit if you rent your home. If you own your home and pay housing-related charges, you may also be eligible for extra amounts within Pension Credit, and you may also qualify for Council Tax Reduction.
Pension Credit eligibility
You can claim Pension Credit as a single person or jointly with your partner, if you have one.
To qualify for Pension Credit, you must:
- have reached state pension age (if you are a couple, see the rules below)
- live in the United Kingdom and have a right to reside here
- meet the income and capital requirements (see below).
Guarantee Credit is calculated by comparing your income and savings with the current minimum guarantee amount (£173.75 a week for a single person and £265.20 for a couple in 2020-21).
For the purposes of Pension Credit, your income includes state pension, personal pensions, employment earnings and most social security benefits, including Carer’s Allowance. Some benefits, however, are not counted, such as Attendance Allowance, Personal Independence Payment, Disability Living Allowance, Housing Benefit and Council Tax Reduction. So getting these benefits will not affect your entitlement to Pension Credit.
Any savings or investments you hold will only be considered if they are worth over £10,000. Every £500 (or part of £500) you have over this amount will be counted as £1 of weekly income. For example, If you have savings of £15,000, this will add £10 to your nominal weekly income.
Savings Credit is worked out by looking at the level of retirement provision you have made.
- Gov.uk has a Pension Credit calculator to help you work out if you’re eligible and how much you could get.
- To find out when you’ll reach state pension age, use the Which? Money state pension age calculator.
Pension Credit rules for couples
Following changes to the rules in May 2019, couples are only eligible for Guarantee Credit once both people have reached state pension age.
If you apply for Pension Credit, one partner must claim for you both. Your joint income and capital is taken into account.
The rules for mixed age couples
If you are a couple and only one of you has reached state pension age, you will need to apply for Universal Credit, until both of you have reached state pension age.
However, if you were already receiving Pension Credit before 15 May 2019 and you are in a couple, you can continue to claim the benefit regardless of your partner’s age.
When to apply for Pension Credit
You can submit your claim for Pension Credit up to four months in advance of your state pension age. This will allow time for the claim to be processed.
You can also claim any time after you reach state pension age, but the claim can only be backdated for three months as long as you have met the eligibility criteria during that time. You should request backdating as it won’t happen automatically.
How do I claim Pension Credit?
You can apply for Pension Credit online, by phone, in writing or in person. If you live in England, Scotland or Wales, this will be via the Pension Service and in Northern Ireland via the Northern Ireland Pension Centre.
You will need:
- your National Insurance number
- information about your income, savings and investments
- your bank account details, if you’re applying by phone or by post.
You can apply online if you’ve already claimed your state pension and there are no children included in your claim.
- In England, Scotland or Wales, use the Pension Credit application portal.
- In Northern Ireland, go to the Pension Credit online page on nidirect.
Claim by telephone
You can apply for Pension Credit by phone. Calls are free.
- In England, Scotland or Wales, call the Pension Credit claim line: 0800 991234
- In Northern Ireland, call the Northern Ireland Pension Centre application line: 0808 100 6165
If you claim Pension Credit by phone, you may be able to claim pension age Housing Benefit and Council Tax Support at the same time. Once the Pension Service has the relevant information, they will contact your local authority, who are responsible for these benefits. However, it’s worth getting in touch with your local authority to let them know about the Pension Credit claim.
A local advice agency or the Pension Service may be able to arrange for someone to help you complete the claim form.
Download a form
You can download a claim form, which will have notes to help you fill it in.
- In England, Scotland or Wales, print out this form and fill it in with a pen.
- In Northern Ireland, download form PC1 from nidirect. You can do this online and then print it off and send to the address given on the form.
If your circumstances change
Tell the Pension Service or the Northern Ireland Pension Centre if your circumstances change, so that you continue to get the right amount of Pension Credit. This includes if you’re admitted to hospital or move into a care home.
Appealing against a Pension Credit decision
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.
Read about the benefits available in later life: Attendance Allowance, PIP, Winter Fuel Payment and more.
Find out about the state pension, including information on the state pension age and how much you’ll receive.
From reviewing your pension options to making a will, here’s how to put a financial plan in place for later life.