Navigating Pension Credit: An Essential Guide for UK Retirees

pension credit, pension benefits

If you live in the United Kingdom and are of retirement age, you may be eligible for pension credit. Pension credit is a welfare benefit meant to supplement your income in retirement. To be eligible for pension credit, you must have reached the qualifying age for state pension.

This guide will take you through everything you need to know about pension credit, including how to apply, how much you could get, and what you need to do if your circumstances change. Keep reading to learn more!

What is pension credit?

Pension credit is a government benefit designed to top up the incomes of pensioners on a low income. To be eligible for pension credit, you must be over 60. If you are married or in a civil partnership, your partner must also be over 60.

Pension credit comprises two parts: the guarantee credit and savings credit. The guarantee credit is the main part of the pension credit and is intended to top up your weekly income to a minimum level. The savings credit is an additional amount you may be entitled to, depending on your savings and income.

If you think you may be eligible for pension credit, you can apply online, by phone, or by post. You will need to provide proof of your identity, National Insurance number, and address. You will also need to give details of your income, savings, and any other benefits you are receiving.

What are the eligibility criteria for claiming pension credit?

You must follow different rules to claim a guarantee pension credit and a savings pension credit. Take a closer look at each:

Guarantee pension credit

Guarantee pension credit is available to people who meet the age and income criteria. The State Pension age (or the age of your partner) must have been reached before you (or your partner) can receive guarantee pension credit.

Guarantee pension credit is only available to one partner in a couple who have reached State Pension age by 15 May 2019.

Pension credits are only available to couples whose members are both eligible for the State Pension by 15 May 2019. If only one partner is ineligible for pension credit but is nonetheless eligible to claim universal credit, the couple may be eligible to claim that instead.

Your savings and capital are fine if you want to claim guarantee pension credit. If you have capital or savings exceeding £10,000, each £500 over this will be counted as $1 in your pension credit calculation. This will affect your grant amount and eligibility.

Savings pension credit

Those over 65 who wish to receive the state pension must reach this age before 6 April 2016. This part of the pension credit scheme requires you to have pensions, savings, earnings, and investments, as well as income from pensions, savings, and investments.

People who reached the state pension age on or after 6 April 2016 could no longer take advantage of the savings credit. The only way you can get the savings credit if you and your spouse are both at state pension age before 6 April 2016 and the other at or after this date is if one of you:

-Pension savings credit was already available to me before 6 April 2016

-Since this date, I have been able to claim the benefit.

Can I get pension credit?

You can claim pension credit whether or not you are working. You also do not have to have paid national insurance contributions.

Guarantee pension credit

Guarantee pension credit may be available if you meet the age and income requirements. You can find out if you qualify by using our benefits calculator.

Age Rules

A person (or their partner) must reach the state pension age to qualify for guarantee pension credit. Gov.UK's state pension age calculator can help determine your eligibility for pension credit

Age rules for couples

Guarantee pension credit will be available to couples who have reached state pension age by 15 May 2019. Couples without a pension credit-eligible partner will not be eligible. However, they may be eligible for universal credit.

universal credit is less generous than guaranteed pension credit. Applicants already claiming housing benefits on 14 May 2019 may be eligible for pension credit if they were over the pension credit age.

If you do not have a change in circumstances after 15 May 2019, you will be able to continue receiving pension credit.  

Income and savings

Guarantee pension credit is only available if your income is low enough. Using our benefits calculator, you can determine if you qualify. 

There is no limit to the amount of savings and capital you can claim for guarantee pension credit. Your pension credit is calculated by counting every £500 you have over £10,000 as £1 of income if you have capital or savings above £10,000.

Savings pension credit

You could get this part of the pension credit if you have a certain amount of income coming in from pensions, savings, earnings and investments and are over 65 and reached State pension age before 6 April 2016.

How much pension credit will I receive?

You may be eligible for different types of pension credit. Calculations can be quite complex, and we recommend seeking guidance or using a pension credit calculator to make the process easier.

Guarantee pension credit

This calculation compares your weekly and your partner's income with a government-set amount each week. To qualify for guarantee pension credit, you must earn no more than:

-Single people pay £182.60 per week

-A couple pays £278.70 per week

In cases where those eligible for guarantee pension credit do not meet these thresholds, guarantee pension credit will be applied to their income.

Your actual amount will depend on your circumstances. Some recipients may receive more money, particularly if they are caregivers or have disabilities. In the case of a high pension income, you may still be eligible for savings pension credit if you do not qualify for guarantee pension credit

Savings pension credit

To qualify for savings pension credit, you must have a weekly income of at least £158.47 for single people and £251.70 for couples.

It is recommended that you receive at least one of these amounts and a maximum of the following amounts to receive this benefit:

-Single people pay £14.48

-Couples can pay £16.20

In general, the more income you receive, the fewer savings credit you receive. Your savings credit is reduced by 40p for every £1 income over the savings credit threshold.

When and how to apply for pension credit

Pension credit is available for people who meet the qualifications (whether single or as a couple) up to four months before their state pension age or when they intend to start receiving it.

Contact the pension credit claim line at 0800 99 1234 if you need assistance.

A member of their staff will take care of filling out your application form.

It is necessary to provide certain information when applying for amount of pension credit.

This includes:

  • Bank account details
  • National insurance number information
  • Your income and savings or investments must be documented.

If you have reached state pension age, you can claim after three months, but your claim cannot be backdated. Consequently, if you qualify for pension credit, you will receive it for three months in your first payment.

Do pension credit affect other benefits?

Pension credit exemptions from the benefit cap, which limits how much working-age households may receive in benefits, are available to people receiving pension credit.

Guarantee pension credit do not count as income when determining entitlement to other benefits. The maximum Housing costs benefit will become available if you receive guarantee pension credit, but you must claim it separately. 

You will also qualify for the following benefits if you receivepension credit payments:

Each year, the government gives a christmas bonus (see its website for details). This is automatically paid to you, and there is no need to file a claim. You won't lose any other benefits as a result.

An award for cold weather. It is optional to claim the cold weather payment if you qualify. 

The guarantee credit part of the pension credit is still available to those who reach state pension age after 6 April 2016.

What to do if your circumstances change?

Your pension credit amount can change if you change your income, capital, or other circumstances. 

You might have been told that an assessed income period applies when you get your pension credit decision if you're 65 or older. The pension service can only know about some changes in circumstances in this case. 

You should also read the accompanying information sheet entitled pension credit: extra information. In this section, you will learn about changes you need to report, even within the assessment period. 

In the absence of an assessed income period, you need to let the Pension Service know of any changes in your circumstances that can affect your pension credit claim. For instance, when you begin working or when your savings are over $10,000.

This will enable them to recalculate your pension credit eligibility and ensure you receive the correct amount. 

Also, remember, if you begin living with a partner under the state pension age from 15 May 2019, you will need to report this. You will no longer be eligible for pension credit. If you're eligible for universal credit, you should apply. 

Call the Pension Service at 0800 731 0469 and choose Option 1 to notify the pension service of your change in circumstances. 

How do you challenge a pension credit decision?

Those disagreeing with the decision on their benefits claim can request a written explanation. Your right to request a re-examination or appeal your decision if you still believe it is wrong, for example, if incorrect information was used.

If you disagree with a decision, you should seek legal advice immediately and appeal within one month.

Frequently Asked Questions

  • Savings and investments value declared at the beginning remains on your file and is calculated at that rate in the future unless you inform the pension service otherwise.

    If you want the pension service to recalculate your entitlement as soon as possible, you should notify them if you spend your savings or the value of your investments drops. Your paperwork should be processed as quickly as possible so you can receive any increase in benefits. Alternatively, you can call 0800 99 1234.

  • When only one spouse has reached state pension age, couples with mixed ages must apply for universal credit, which is much less valuable to many. As a result, Age UK says the change could cost some couples up to £7,000 a year in pension credit. You can apply for pension credit as soon as you're both of state pension age (universal credit will not be available once you're both of state pension age).

    The couple can still claim pension credit if they are also claiming housing benefits for the couple, even if they are at state pension age.

  • If you're applying, you have to live in the UK. The government can't stop you from getting financial help if there are any immigration restrictions. Additionally, you must satisfy the 'habitual residence test.

Employee Regulations
Rinaily Bonifacio

Written by:

Rinaily Bonifacio

Rinaily is a renowned expert in the field of human resources with years of industry experience. With a passion for writing high-quality HR content, Rinaily brings a unique perspective to the challenges and opportunities of the modern workplace. As an experienced HR professional and content writer, She has contributed to leading publications in the field of HR.


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