Article Are you eligible for Pension Credit? A step-by-step guide to finding out

Pensioners can sometimes find it tough to manage on a lower income than they were used to during their working life. If you’re looking for ways to boost your retirement income, you can check you’re getting all the benefits you’re entitled to, such as Pension Credit.

Pension Credit is an important benefit but one that is often overlooked. Government figures show there are an estimated 880,000 households eligible for Pension Credit that have not yet claimed it. This means many pensioners are missing out on £3,900 a year – the average Pension Credit award.¹

Pension Credit is designed for pensioners on a low income. It acts as a ‘gateway benefit’, meaning it can open the door to additional benefits such as:

• Winter Fuel Payment
• Housing Benefit
• Council Tax reduction
• NHS health costs (prescriptions, dental treatment, glasses, for example)
• Warm Home Discount Scheme
• Cold Weather Payments
• Free TV licences for over 75s²

The Government has announced that from this year it will scrap the Winter Fuel Payment for everyone except those claiming means-tested benefits including Pension Credit.³ Winter Fuel Payment is an annual payment to help with heating costs during the colder months. This benefit alone is worth up to £300 a year, so it’s worth checking whether you could claim this and other valuable benefits by qualifying for Pension Credit.

While 1.4 million UK pensioners do claim Pension Credit, there are many that don’t even apply.⁴ This could be because they think the process is complicated or aren’t sure they would qualify. In fact, the application process is quite straightforward, and you can check in advance whether you’re likely to succeed.

In this guide, we’ll break down how to find out if you’re eligible for Pension Credit, and how it could unlock extra support. Read on to explore the steps to take so you don’t miss out on this critical benefit.

How much could you get?

There are two elements to Pension Credit: Guarantee Credit and Savings Credit. Some people will be entitled to both, others just one.

Guarantee Credit compares your income to an amount the Government thinks is the minimum you need to live on. This amount is £218.15 per week if you’re single, or £332.95 per week if you live with a partner.⁵ Guarantee Credit tops up your income to this level.

Savings Credit gives you up to £17.01 per week as a single person or £19.04 as a couple if you have savings or a second pension.⁵ It’s designed to reward people who have made some provision for their own retirement. to claim, you’ll need to have reached State Pension age before 6 April 2016.

Who is eligible for Pension Credit?

There are a few eligibility requirements to know about before you apply for Pension Credit. Here is a checklist to help you work out if you’re eligible:

• You must live in England, Scotland or Wales.
• You must have reached State Pension age – currently 66 for both men and women.
• You must meet residency conditions.
• If you have a partner you live with, you both must have reached State Pension age OR one of you must be getting housing benefit for people above State Pension age.⁵
• Your income (and that of your partner, if you have one) is calculated when you apply for Pension Credit. You might be able to get Savings Credit even if your income is above the weekly minimum amount the Government has set.

What counts as income?

• Your State Pension (even if you have deferred it, the amount you would get is counted as income)
• Any other pensions
• Earnings from employment and self-employment
• Most benefits, e.g. Carer’s Allowance

What doesn't count as income? 

There are some benefits that aren’t considered in your income calculation. These are:

• Adult Disability Payment
• Attendance Allowance
• Christmas Bonus
• Child Benefit
• Disability Living Allowance (DLA)
• Personal Independence Payment (PIP)
• Social fund payments such as Winter Fuel Payment
• Housing Benefit

If you’re a carer, responsible for children, disabled, or have housing costs, you might be entitled to more Pension Credit. A carer could get up to £45.60 per week extra, while someone with a severe disability could get up to £81.50 per week.⁵

If you have modest savings or a second pension, you might qualify for Savings Credit. You can find more information about eligibility on the government Pension Credit website. 

The Government also has a Pension Credit calculator to help you check if you’re eligible to claim and how much you could get.

Understanding the application process

You can find information on how to apply for Pension Credit on the Government’s website.

Here’s a step-by-step guide:

Gather your documents

You’ll need:

• Your National Insurance number
• Information about your income, savings and investments
• Your bank account details
• Details of your housing costs
• Your partner’s details, if you’re married, in a civil partnership, or living together

Ways to apply

• You can apply online if you’ve already applied for your State Pension.
• You can apply by phone, or a friend or family member can call for you.
• You can apply by post. You’ll need to print out, fill in and post back this form. 

Common challenges

You might find it difficult to know when the right time is to make your claim. You can apply for Pension Credit when you reach State Pension age, or you can start your application up to four months in advance.

The concept of ‘backdating’ could also catch you out. All this means is that you can claim Pension Credit at any time after you reach State Pension age, but your application can only be backdated by three months. This means you can get up to three months of Pension Credit in your first payment if you were eligible during that time. To avoid missing out on money you’re entitled to, don’t wait too long to start your claim.

If you’ve applied for Pension Credit before and been turned down, you can make a new application each year. You can also challenge a decision you don’t agree with. 

Unlock financial support

Pension Credit is a useful benefit for retirees and can unlock significant financial support to make your life in retirement easier. If you qualify, it’s certainly worth having, so take action and explore your options. Try out the eligibility calculator and consider applying for Pension Credit to stay in control of your retirement finances.