What is Pension Credit?

Pension Credit is a benefit for older people in England, Scotland and Wales. It’s designed to top up your income to a minimum amount, helping you with everyday living costs. It may also open the door to other benefits like free TV licences, Council Tax reductions and reduced NHS costs, which you can read in more detail later further down this page.

There are two parts to Pension Credit: Guarantee Credit and Savings Credit. 

• Guarantee Credit tops up your weekly income to a minimum level.

• Savings Credit is a smaller payment for those who’ve saved some money for their retirement, such as in a personal pension or in savings.

Not everyone gets both. It’ll depend on your income, savings and when you reach your State Pension age.

You might qualify for Pension Credit if you’re over State Pension age and on a low income. Many people miss out because they’re not sure if they’re eligible, so it’s worth checking. Pension Credit eligibility will depend on different factors, such as your financial situation and who you live with. 

When you apply for Pension Credit, your income (and your partner’s income) is looked at. If you live with a partner, you’ll need to apply for Pension Credit together. That includes: 

• Your husband, wife or civil partner if you live together, or

• Someone you live with as if you’re a couple, even if you’re not legally married or in a civil partnership

You may be able to claim Pension Credit if: 

• You’ve both reached State Pension age, or

• One of you is already getting Housing Benefit for people over State Pension age

When calculating your Pension Credit eligibility, the Department for Work and Pensions (DWP) take into account most kinds of income, such as: 

• Your State Pension

• Workplace or private pensions 

• Earnings (if you’re still working)

• Most social security benefits like Carer’s Allowance

Some types of support aren’t included when calculating your income, such as those that go towards extra needs you may have. Examples include: 

• Personal Independence Payment (PIP)

• Attendance Allowance

• Disability Living Allowance (DLA)

• Housing Benefit

• Council Tax reduction 

There are two elements to Pension Credit: Guarantee Credit and Savings Credit.

Guarantee Credit is there to top up your weekly income to: 

• £227.10 if you’re single

• £346.60 if you’re in a couple and living together 

Savings Credit is for those people who reached State Pension age before April 2016, and already have retirement provision in the form of work, savings or a private pension. This may give you a top-up of £17.30 per week if you’re single or £19.36 per week if you’re in a couple and living together.

When you’re applying for Pension Credit, it’s natural to wonder how any savings you have might be taken into account. Here’s a clear breakdown of how your savings and investments are usually considered:

If you have £10,000 or less in savings

This amount generally won’t affect your Pension Credit. This means you don’t need to worry about this part of your savings impacting your claim.

If you have more than £10,000 in savings

The rules work a little differently. For every £500 you have above £10,000, the DWP will count £1 as extra income per week towards your Pension Credit calculation.

Let’s look at an example to make it clearer:

• Imagine you have £11,000 in savings

• The first £10,000 is not counted

• You have £1,000 above the limit (£11,000 minus £10,000)

• For every £500 of that £1,000, £1 is counted. So, £1,000 divided by £500 equals 2

• This means £2 per week would be counted as income from your savings for Pension Credit purposes

Thousands of people are missing out on Pension Credit because they simply don’t know that they’re eligible. As well as boosting your income, Pension Credit could open doors for more financial support, such as: 

• A free TV licence 

• Council Tax reductions

• Free NHS dental treatment

• Help with the cost of glasses or contact lenses

Make sure to check the conditions of each benefit, as you may only be able to claim if you receive Guarantee Credit, for example.

You can start a Pension Credit application up to four months before you reach the State Pension age. To start your application, you’ll need to hand yours and your partners (if you have one): 

• National Insurance number

• Details of income, savings and investments 

• Bank account details 

We know that times are tough right now, and finding ways to boost your income and access support is more important than ever. Ready to explore how you can get more financial help?

1. Discover if you’re eligible for extra benefits

Use the quick and easy benefits calculator today to check if you could be missing out on valuable financial support.

2. Search for free grants

The Turn2us Grants Search can help you find charitable grants you might qualify for – money you don’t have to pay back.

3. Get free debt help

If debt is weighing you down, find free, accredited and friendly CAP debt help services in your area.