Pension Credit is a top up available to people of State Pension age who are living on low incomes to help with living costs.
Pension Credit is a top up available to people of State Pension age who are living on low incomes to help with living costs. There are no restrictions on what you can use the money on, and it can also lead to additional support through various other measures which we will explain more about below.
There are two ‘parts’ to pension credit; you could get one or both parts –
Savings Credit is only available to you if you reached State Pension age before April 6th 2016.
At Society Matters we firmly believe that everyone deserves dignity and comfort in their older years and Pension Credit can be an invaluable way for those on the lowest incomes to boost their incomes and afford themselves the comfort they deserve, helping them to lead lives well lived well into their later years.
Unfortunately, we know that Pension Credit itself is a massively underclaimed benefit, with Martin Lewis estimating that approximately 800,000 of the UK’s poorest households are missing out on this vital financial support, worth on average around £3,500 per year. This equates to an estimated £1.8bn annually in Pension Credit that is currently going unclaimed during a cost-of-living crisis.
In response to this, the government have launched a trial aimed at 10 local authorities to raise awareness of Pension Credit. The DWP estimate this will target around 2000 households claiming Housing Benefit but not Pension Credit with letters and leaflets informing them of potential eligibility. Whilst we welcome any attempt by the government to help people get the support they’re entitled to, it’s important to bear in mind this is 2000 households of approximately 800,000. In light of this, we wanted to take some time to focus on Pension Credit; what is it, what can you get, what are the misconceptions and what else might you get if you do receive it?
Pension Credit can top up your weekly income up to:
The most you can get from the Savings Credit of PC is
The exact amount of Pension Credit you receive will depend on any savings and income you (or your partner) may have.
On top of this however, Pension Credit also has various ‘premiums’ you or your partner may be entitled to, depending on your circumstances. In these cases, your income can go over the amounts given above.
For example, if you are receiving a qualifying disability benefit such as Attendance Allowance, you can receive a ‘severe disability premium;’ an additional £76.40 for a single person or £152.80 per week if you’re part of a couple and both eligible (i.e. both receiving a disability benefit).
If you are a carer (i.e. receiving Carers Allowance), you can receive an additional £42.75 per week added to your claim.
As we’ve mentioned, Pension Credit is a massively underclaimed benefit, with around 800,000 households missing out on support they’re entitled to, but why might this be the case?
Firstly, people over pensionable age, are the age group that are least likely to reach out for support or to undergo a full benefit check. Advisers will also tell you Pensioners are also more likely not to apply for benefits on the grounds that they perceive benefit “handouts” or to be shameful, there can be a stigma attached to getting support from the state.
Unfortunately, there are a lot of misconceptions when it comes to the eligibility criteria for Pension Credit. Research by the DWP itself has shown many people believe that owning a home, or having some savings excludes a person from claiming Pension Credit but this is often not the case. Home ownership (the home a person lives in) should not prevent you applying for Pension Credit. In regard to savings, there is a common misconception that there is a cut-off point of £10,000 in savings, after which a person who has more than this cannot apply for Pension Credit. Again, this is not the case. Pension Credit itself is awarded more like a sliding scale where savings over £10,000 will reduce the amount you get, not end it altogether. Even receiving a small amount of Pension Credit will also entitle you to the support outlined below, so it’s always worth checking.
One of the key benefits of Pension Credit is that, aside from the direct top-up to a person’s income, it can also act as a passport to other forms of financial aid or support.
For example, if you receive Pension Credit, you may be entitled to a reduction in your Council Tax bill. There is no single council tax support scheme; you would need to contact your local authority to see exactly what support they offer but as an example, in Gateshead, this can be a reduction of up to 100% of your Council Tax bill.
Pension Credit should also qualify a person for the cost-of-living payments. The first 2023 payment of £301 was made between 25 April and 17 May. The second payment is for this Autumn (date to be confirmed) and will be £300. There will be a further payment in Spring 2024 of £299. This could be in addition to the Pensioner Cost of Living Payment and Disability Cost of Living Payment if applicable.
Receipt of Pension Credit can also entitle claimants to additional support such as free TV licenses (where the claimant is over 75 and in receipt of Pension Credit), the Warm Home Discount Scheme (a £150 payment towards a person’s towards a person’s electric bill) or Cold Weather Payments (payments of approximately £25 per week which can be paid automatically to eligible people in the event the temperature drops below a certain point for a sustained period of time) to assist with fuel costs.
As well as additional direct financial support, however, receipt of Pension Credit can also entitle individuals to free NHS dental care as well as voucher contributions towards the cost of glasses, if necessary.
Taken together then, we can see how Pension Credit and the further support it can afford claimants can be potentially life-changing for people on low incomes. In the face of the continued squeeze on household incomes, helping people to access this support is more crucial than ever.
You can use the Pension Credit calculator to work out if a person is entitled to any Pension Credit, or if a person may struggle with this they could contact their local Citizens Advice for support. Once you’ve established an entitlement to Pension Credit, we would recommend getting a full benefit check from an organization like Citizens Advice or Age UK in order to establish what additional support a person may be entitled to.
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