What is Pension Credit?
Pension Credit (also known as State Pension Credit) is a benefit for people aged 60 or over living in Great Britain. It aims to ensure that everyone in that age group has a basic income.
There are two elements of Pension Credit; Guarantee Credit and Savings Credit. Some people will receive both while others will get either one or the other.
- Guarantee Credit
- Savings Credit
- How will income and savings be assessed?
- Income
- Savings
- Calculating your entitlement
- How do I apply?
- Other pension enquiries
Guarantee Credit
Guarantee Credit is calculated in a similar way to Income Support. If your income is less than the basic amount the law says you need to live on, you will receive the difference as Guarantee Credit. Consequently, if you are aged 60 or over you should have an income, including the Guarantee Credit top-up, of at least:- £124.05 a week if you are single; or
- £189.35 a week if you have a partner.
On top of these figures there is an additional amount for people with a severe disability of £50.35 per week for each person who qualifies. To qualify, you must:
- receive either the middle or highest rates of Disability Living Allowance or either rate of Attendance Allowance; and
- have no one receiving Carer's Allowance for looking after you; and
- technically count as living on your own.
There is also an additional amount for carers of £27.75 per week for each person who qualifies. To qualify you must be:
- paid Carer's Allowance; or
- have an underlying entitlement to Carer's Allowance, but it cannot be paid because you receive another benefit which overlaps with it.
Savings Credit
Savings Credit is intended to provide extra money for people who have built up modest savings or income (including occupational or personal pensions). It can be paid if you (or your partner) are aged 65 or over. The maximum amount of Savings Credit that can be paid is:- £19.71 if you are single; or
- £26.13 a week if you have a partner.
How will income and savings be assessed?
To find out if you are entitled to Pension Credit, you will need to add up your weekly net income (after deductions) and savings.Income
The following types of income are included when your entitlement to Pension Credit is calculated:- pensions (including State Pension and occupational or personal pensions);
- certain benefits (for example, Carer's Allowance and Bereavement Allowance);
- earnings from a job.
Types of benefit income not included:
Savings
Savings under £6,000 are ignored. Savings above £6,000 will be deemed to create income, which will be taken into account. The amount of income you have from savings above £6,000 will be calculated according to the lump sum of your savings rather than actual interests or dividends you receive. For every £500 (or part of £500) of savings you have above the £6,000 threshold, you are considered to have an income of £1 a week. For example, someone with £10,000 of savings is assessed as having a weekly income of £8, while someone with savings of £25,000 is assessed as having a weekly income of £38.The types of savings and investments that will be taken into account include:
- money in a bank, building society or Post Office account;
- National Savings certificates;
- Premium Bonds;
- investments like ISAs, PEPs and TESSAs;
- an income bond, capital bond or granny bond;
- shares or unit trusts;
- property and land (but not including the place where you normally live).
Calculating your entitlement
The Department for Work and Pensions' Pension Service website has an online calculator that can help you estimate what your entitlement may be.How do I apply?
There are three ways to apply for Pension Credit.- You can apply for Pension Credit by calling the Pension Credit application line 0800 99 1234 (8am to 8pm Monday to Friday).
- You can Download an application form, and fill it in by hand and post it to your Pension Centre, details of which are available on the website. You will need Adobe Acrobat Reader to print this form.
- You can complete the application form online, then print it and post it.
