MORE than a million households are currently claiming pension credit – but hundreds of thousands are still missing out.
The benefit is designed to help people over state pension age and on a low income with daily living costs.
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You don’t need to be in receipt of the state pension to receive it.
Pension credit is described as a “gateway benefit” because even a small award can provide access to a wide range of other benefits.
This can include help with housing costs, council tax or heating bills – in addition to the extra cost of living payments.
The yearly help is typically worth more than £3,000 a year.
Around 1.4million pensioners receive pension credit, but 850,000 who could be eligible are not claiming this extra financial help.
The government, Martin Lewis and investment group AJ Bell have all called on eligible pensioners to apply for the benefit in order to qualify for the £301 cost of living payment going out this year.
A successful pension credit application made by May 19 can be backdated by up to three months.
Anyone who was entitled to the benefit between January 26 and February 25 can get all three instalments of the £900 help.
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How much can you get in pension credit?
There are two parts to the benefit and pensioners can be eligible for one or both parts – here are the current rates for the tax year:
- Guarantee credit – tops up your weekly income to a guaranteed minimum level. This is £201.05 a week if you’re single and £306.85 a week for married couples.
- Savings credit – provides extra money if you’ve saved money towards retirement. You can get an extra £15.94 a week for a single person or £17.84 a week for a married couple.
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.
For instance, you can get either £61.88 a week or £72.31 per week for each child or young person you’re responsible for.
If you are disabled or care for someone who is disabled, you may get more.
For example, if you have a severe disability you could get an extra £76.40 a week or if you care for another adult you could get an extra £42.75 a week.
To find out how much you can get and if you’re eligible, use the calculator on the GOV.UK website.
You’ll need details of earnings, benefits, pensions, savings as well as investments to use it.
Plus, you’ll need the same details for your partner if you have one.
Who is eligible?
It is available for people who are over the state pension age, and who live in England, Scotland or Wales.
This is currently rising to 66 for both men and women.
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.
To qualify, you’ll need to have a weekly income of less than £201.05 for single people or £306.85 for couples.
Your income is worked out taking into account various elements including:
- 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.
How do I apply?
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.
Again, 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 3 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 will I be paid?
Your benefits are typically paid into a bank account every four weeks.
You’ll be asked for your bank, building society or credit union account details when you claim.
But if you have problems opening or managing an account, you might be able to claim a different way.
Meanwhile, here’s a full list of freebies available to pensioners, including those on pension credit.
Plus, Martin Lewis has issued an urgent warning to thousands who risk missing out on up to £30,000 to boost their income.
