A former pensions minister is urging people to check if they, or someone they know is missing out on pension credit, after the most recent government figures revealed an estimated £1.8bn in pension credit was unclaimed in the 2018-19 financial year.
In a new blog post on her website, Baroness Ros Altmann – who was pensions minister from May 2015 to July 2016 – highlights that pension credit, which boosts state pension payments for those on low incomes, guarantees single pensioners at least £9,000 per year, but over a million people could be missing out.
Claiming pension credit may give you access to a raft of other perks such a free TV Licence, free NHS dental treatment, and help towards the cost of glasses, that could save you thousands of pounds a year.
Here, Which? explains how pension credit works and the benefits it opens the door to that can boost your income.
How does pension credit work?
Pension credit tops up the state pension for those on a low income, and is awarded to you based on your earnings.
It can be claimed for you and your partner, whether it be your husband, wife, civil partner or someone you live with as though you are married/civil partners. If you have a partner, the income and capital you both have is taken into account when your pension credit is calculated.
Pension credit is made up of two parts:
- Guarantee credit: this tops up your weekly income up to £177.10 in 2021-22 if you’re single and £270.30 for a couple. If you’re a carer, have severe disabilities or certain housing costs, you might qualify for more guarantee credit.
- Savings credit: this is available for people who reached retirement age before 6 April 2016, meaning you’d qualify for the basic state pension. However, if you’re a couple and your partner reached state pension age before 6 April 2016, you could still qualify. It provides £14.04 for a single person and £15.71 for a couple per week if you meet the qualifying criteria.
There is a pension credit calculator on the gov.uk website to help you check your eligibility for pension credit. The calculator will also give you an estimate of the pension credit payment you are due based on your earnings, benefits, pensions, savings and investments.
- Find out more: how pension credit works
How do I claim pension credit?
To claim, you will need your National Insurance number, information about your income, savings and investments and your bank account details.
Pension credit can be backdated for up to three months as long as you have satisfied the entitlement conditions during that period. You’ll need to request backdating on the claim form as it’s not automatic.
A pension credit claim can also be lodged up to four months in advance if you’re approaching the qualifying age or are about to become entitled for another reason.
If you’re helping someone else check if they’re eligible, you can call the Pension Service on their behalf if they can’t do it themselves.
Nine pensioner perks and benefits to boost your income
Even if you’re only entitled to a small amount of pension credit, it’s still worth claiming as it can help unlock heaps of other perks.
Baroness Ros Altmann estimates total average savings can amount to almost £13,000 per year, though prices depend on your own housing cost and the region you live in.
We outline some of the ways you can get extra retirement income via pension credit below, as well as other discounts and freebies available to retirees.
1. Housing Benefit
If you get pension credit you may get your some or all of your rent paid in full by your local authority.
When you claim pension credit, you might be asked if you want to make a claim for housing benefit at the same time. If not, you can contact your local council yourself and apply.
If you own your home, you won’t be eligible for housing benefit, but you could get help paying your mortgage interest.
2. Medical freebies and discounts
You can get free NHS dental treatments if you get guarantee credit.
You can also claim help towards the cost of glasses and travel to hospital.
3. Carer perks
If you’re a carer and are awarded carer’s allowance you may get what’s known as the ‘carer addition’ included in your pension benefit payments, worth up to £36.85 per week.
4. Free TV Licence
In August 2020, the BBC introduced a new scheme that offers some over-75s a free TV Licence.
You can get a free TV Licence if: you, as the licence holder, are 75 years or older and you, and your partner living at the same address, receive pension credit.
5. Warm homes discount
If you get the guarantee credit element of pension credit you qualify for the warm home discount.
You could get £140 off your electricity bill for winter 2021-22 under the scheme, according to the government.
The qualifying date is usually in July (4 July 2021 this year), and if you’re eligible you should receive a discount the following winter.
You should receive a letter from the Department for Work and Pensions (DWP) between October and December 2021 telling you how to get the discount if you qualify.
If you don’t get one by 31 December 2021, contact the Warm Home Discount helpline on 0800 731 0214.
6. Cold weather payments
You’ll usually get cold weather payments if you get pension credit.
You’ll get a payment if the average temperature in your area is recorded as, or forecast to be, zero degrees Celsius or below over seven consecutive days.
You’ll get £25 for each seven day period of very cold weather between 1 November and 31 March.
The 2020 to 2021 scheme has now ended. You’ll be able to check if your area is due a payment when this year’s scheme starts on 1 November 2021.
7. Winter fuel payment
- Retirees get the winter fuel payment automatically if they receive the state pension or certain other benefits.
- The current rates are £200 per eligible household where the oldest person is under 80, and £300 for households containing someone aged 80 or over.
8. Cheaper days out
Whether or not you’re claiming pension credit, pensioners can get discounts on a range of leisure activities including:
- Museum visits – most museums offer concessions for senior citizens – English Heritage and National Trust also offer reduced memberships.
- Cinema tickets – Odeon, Vue and Empire offer cheaper tickets to pensioners.
- Sports tickets – older sports fans can get discounted matchday season tickets for football, cricket and rugby games. The cheaper tickets are usually available for those over the age of 65.
9. Travel discounts
You can also save money on travel if you’re over a certain age, such as:
- Free bus pass – in Wales, Scotland, Northern Ireland and London you can get a pass for free travel when you reach 60, in the rest of England you usually only become eligible for one when you reach state pension age.
- Senior railcard – available to those over 60, it costs £30 a year and enables you to get a third off standard and first class anytime, off-peak and advance fares.
Find out more: the perks and benefits of being retired