Pension Credit

Pension Credit is a benefit for people over State Pension age on lower incomes.

It has two parts:

• Guarantee Credit
• Savings Credit.

Only people who reached State Pension age before 6 April 2016 qualify to claim the Savings Credit part of Pension Credit.

If you reach State Pension age on or after 6 April 2016, you can still get the Guarantee Credit part of Pension Credit.

Even if you find out you’re only entitled to a small amount of Pension Credit, it’s worth claiming. This is because it might help you qualify for other benefits, as well as providing some extra income. 

The amounts shown below are for the 2022-23 tax year.

Guarantee Credit tops up your weekly income to a guaranteed level of £182.60 if you’re single or £278.70 if you’re married or in a civil partnership.

Savings Credit provides some extra money if you’ve made some provision towards your retirement by saving, or with a pension other than the basic State Pension.

The extra income provided by Savings Credit is up to:

• £14.48 a week for a single person, and
• £16.20 for married couples, civil partners or a partner you live with as if you were married.

However, you won’t qualify for Savings Credit if you reach State Pension age on or after 6 April 2016.

You might get a higher amount of Pension Credit if:

• you’re disabled
• you have caring responsibilities, or
• you’re responsible for paying certain housing costs, including mortgage interest payments.

To claim Guarantee Credit, you need to have reached State Pension age.

To qualify for Savings Credit, you must have reached State Pension age before 6 April 2016. The amount you’ll get will depend on the savings and income you already have. 

You can claim Pension Credit regardless of whether you’re still working or have retired. You can also claim if you have other income, savings or own your own home.

After you or your partner reach State Pension age, any money either of you take out of your pension pots and any money left in the pension pot owned by the person over State Pension age will be taken into account when your income is assessed. 

If you have £10,000 or less in savings or investments (including your pension pot) it won’t affect how much Pension Credit you’ll receive. But you might get a reduced amount if you have more than £10,000 saved. 

For every £500, or part of £500, of pensions or savings you have over £10,000 – you’ll be treated as having an income of £1 a week. This is added to any other income you have, such as a pension. 

For example, you’re 67 and applying for Pension Credit. You have a pension pot of £40,000 and have taken a lump sum of £10,000 from your pot. Your remaining pot is £30,000. Because you’re past State Pension age, both amounts will count when you’re assessed for benefits.

If you leave money in a pension pot the Department for Work and Pensions (DWP), HMRC or your local council would check how much you’d get if you had bought a guaranteed income for life (an annuity). 

They’ll take this amount into account when they assess your income.

If you keep the money in your pension pot and take income from it either regularly or as and when you want, they’ll look at how much you’d get if you bought a guaranteed income for life (an annuity). They’ll also look at how much flexible income you’re taking. The higher amount will be used when you’re assessed for benefits.

It’s your responsibility to tell DWP, HMRC or your local council if you or your partner take any money from your pension pot.

If you deliberately spend or give away money (including tax-free cash) from your pension pot to get or increase benefits, the DWP or your local council might assess your eligibility again and treat you as still having that money.

As well as any income or lump sum taken from your pension pot, your other assets (such as savings and investments) might also count when you’re assessed for benefits.

If you’re in a couple you only qualify to make a new claim for Pension Credit if one of the following rules applies to you:

• Both you and your partner have reached State Pension age
• Or, one of you has reached State Pension age and is claiming Housing Benefit for you as a couple.

If you’re in a couple and don’t qualify for Pension Credit under these rules, you can both apply for Universal Credit instead.

If you were claiming Pension Credit before 15 May 2019, when the rules changed and your partner is under State Pension age, you will carry on receiving Pension Credit for as long as you qualify. 

However, if your circumstances change (for example, your income increases) and you lose your entitlement to Pension Credit, you won’t be able to start getting it again until you and your partner qualify under the new rules. 

Similarly, if you are single and claiming Pension Credit and you now start living with a partner who is under State Pension age, you will lose your entitlement until your partner also reaches State Pension age.

If you qualify for Pension Credit (whether single or as a couple), you can apply up to four months before your State Pension age or for when you want to start receiving it.

The quickest way is to call the Pension Credit claim line on 0800 99 1234.

They’ll fill in the application form for you.

To apply for Pension Credit you will need to provide certain information.

This includes:

• your bank account details
• your National Insurance number
• evidence of your income and your savings or investments.

You can claim any time after you reach State Pension age but your claim can only be backdated for three months. This means you can get up to three months of Pension Credit in your first payment if you qualify during that time.

The amount of Pension Credit you get might change if your income, capital or other circumstances change.

If you’re 65 or over, you might have been told when you got your Pension Credit decision that an assessed income period applies to you. In this case, you don’t need to tell the Pension Service about every change in circumstance.

However, make sure you check the accompanying information sheet called Pension Credit: extra information. This tells you about changes you must report even within an assessed income period.

If an assessed income period doesn’t apply, you must tell the Pension Service immediately about any change in your circumstances that might affect how much Pension Credit you get. For example, if you start work or if your savings go above £10,000.

That way, they can recalculate your Pension Credit entitlement and make sure you get the right amount.

And remember that since 15 May 2019, if you start to live with a partner who is under State Pension age, you’ll need to report this and will no longer be able to claim Pension Credit. You'll need to apply for Universal Credit instead.

To notify the Pension Service of a change in circumstances, call them on 0800 731 0469 and choose Option 1. 

If you qualify for Pension Credit (even if you don’t currently receive it), you can usually get other benefits and financial help. 

If you or someone in your household is over 75 and claiming Pension Credit, you can also claim a free TV Licence.

To claim your free TV Licence, call TV Licensing on 0300 790 6117 to ask for an application form. You’ll need to provide proof of age and that you receive Pension Credit.

If you’re already paying for a TV Licence then you can sign into your online account at tvlicensing.co.ukOpens in a new window to apply for a free one. If relevant, you’ll also get a backdated refund.

If you’re eligible for Pension Credit, you’ll also receive this year a one-off, tax-free £650 payment for help with the cost of living.

The payment will be made in two lump sum instalments. The first instalment of £326 will be paid from 14 July, and the eligibility date for the second instalment of £324 will be announced soon.

To be eligible for the first instalment, you must have been entitled to, or already receiving, Pension Credit any day during the period of 26 April to 25 May 2022.

The payment will not count towards the benefit cap and will not affect any existing benefits you receive.

If your household qualifies for the Winter Fuel Payment, and you’ll be over State Pension age between 19 to 25 September 2022 then you’ll also receive a one-off bonus payment of £300.

It will be paid automatically as a top-up to your Winter Fuel Payment.

If you’ve reached State Pension age you might be eligible for Housing Benefit to help with your rent payments.

If you own your own home you might be able to apply for Support for Mortgage Interest (SMI). 

This is a loan from the government to help you pay the interest on your mortgage payments.  

If you get the guarantee element of Pension Credit then you might be able to get free NHS dental care and other help.

If you live in England or Wales you might be able to get a discount on your council tax.

Some providers offer low-cost plans to help you make mobile calls and get online if you’re getting Pension Credit.

There is an estimated £19billion sitting in lost pension pots. It’s free to check if you have any lost pensions from previous jobs.