OVER a million benefit claimants are set to get a pay rise in days and we reveal the key date to circle in your calendar.
The Government confirmed that pension credit rates will increase by 8.5% in April due to the triple lock remaining in place.
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Chancellor Jeremy Hunt first revealed that the state pension will be going up by £901 in his Autumn Statement.
At the same time pension credit payments, worth an average of £3,900 a year, are also rising.
The amount pensioners can get from the state rises every year to keep up with the cost of things like food and household bills.
The triple lock system sees the pension credit rise in line with whatever is highest out of: wages for May to July, 2.5%, or September’s inflation figures.
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Growth in employees’ average total pay was 8.5% in the three months to July last year, while the UK’s rate of inflation remained at 6.7% in September.
The Department for Work and Pensions confirmed both pension credit and the state pension will rise from April 8 – the first Monday after the new tax year begins.
It means pensioners signed up to receive the benefit will see a rise from £201.05 a week to £218.15, and from £306.85 to £332.95 for couples.
But the date it will rise will vary depending on when you normally get paid too.
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Pension credit is usually paid every four weeks, so if you are expecting a payment between April 1 and 5, you might not actually see your pay rise until early May.
What is pension credit?
Pension credit is worth around £3,900 a year on average and unlocks many other benefits, such as council tax reductions and help with energy costs.
There are other bonuses available too, such as cold weather payments, free NHS dental treatment and a free TV licence.
While around 1.4million pensioners are already receiving pension credit, there are an estimated 880,000 households eligible for the support who are yet to claim it.
It’s definitely worth seeing if you can apply.
How do I apply for pension credit?
YOU can start your application up to four months before you reach state pension age.
Applications for pension credit can be made on the government website or by ringing the pension credit claim line on 0800 99 1234.
You can get a friend or family member to ring for you, but you’ll need to be with them when they do.
You’ll need the following information about you and your partner if you have one:
- National Insurance number
- Information about any income, savings and investments you have
- Information about your income, savings and investments on the date you want to backdate your application to (usually three months ago or the date you reached state pension age)
If you claim after you reach pension age, you can backdate your claim for up to three months.
How much are payments increasing by?
Retirees on a low income can get it topped up via Pension Credit.
Pension Credit will go up from £201.05 a week to £218.15 or for couples, from £306.85 to £332.95.
If your income is lower than this, you should be eligible for the benefit.
You could get the “Savings Credit” part of Pension Credit if both of the following apply:
- You reached State Pension age before April 6, 2016
- You saved some money for retirement, for example, a personal or workplace pension
This part of Pension Credit will increase from £15.94 a week to £17.01 or for couples, from £17.84 to £19.04.
You may also get additional pension credit if you are disabled, have caring responsibilities or have to pay certain housing costs such as mortgage interest payments.
You can find out more about Pension Credit including how to apply in our guide.
Who is eligible for pension credit?
Anyone over the state pension age living in England, Scotland, or Wales is eligible for pension credit.
The state pension age is currently 66 for both men and women.
To qualify, you must have a weekly income of less than £201.05 for single people or £306.85 for couples.
Of course bear in mind, this minimum is going up to £218.15 and £332.95 respectively from April 8.
Your estimated income could include:
- Your state pension
- Any other pensions you have saved, for instance, workplace or private pension savings
- Most social security benefits, for example, carer’s allowance
- Any savings or investments worth over £10,000
- Earnings from a job
The calculation does not include:
- Attendance allowance
- Christmas bonus
- Disability living allowance
- Personal independence payment
- Housing benefit
- Council tax reduction
If your income is too high to get pension credit, you may still get some savings pension credit, so it’s worth checking.
It used to be the case that couples, where one person was over state pension age, could claim, but new rules now mean that both people in a couple must be over retirement age to apply.
This means if you’re single and move in with a partner who is younger than the state pension age, you will stop being eligible.
But if you’re already receiving pension credit under the old system it won’t stop unless your circumstances change.
How to check what benefits you could be entitled to
The quickest way to see what benefits you may be able to claim is to use one of the three benefit calculators recommended by Gov.uk.
Each one is free to use. They are:
Before using the tools, make sure you have key financial information to hand, such as bank and savings statements, and information on pensions and existing benefits.
If you live with a partner or family, get their basic financial information together too as this could affect your claim.
For each of these, you’ll be asked information about your circumstances, such as your current employment and income.
You’ll also need to give information about yourself, including your age and who you live with.
You can then use the contact information on Gov.uk to get the ball rolling and apply for what you’re owed.
Of course, the tools only provide an indicator of what benefits you can claim – and usually don’t include means tested benefits, so you may be entitled to even more.
How will I be paid?
Your benefits will usually be paid into a bank account roughly every four weeks.
You will be asked to provide your bank account details when you claim.
Concessions are sometimes made for people who don’t have access to a bank account.
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Meanwhile, we also reveal the exact date within weeks millions on Universal Credit and other benefits will get a pay rise.
Plus, how much state pension is rising by from April 8.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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