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Published 06 April 2023

How to get pension credit

Pension credit is a tax-free government benefit available to people over state pension age who are on a low income. There are two main forms: savings credit and guarantee credit.

If you have a low income in retirement you may be eligible for pension credit. But a shocking one in three people entitled to pension credit never claim it. Read on to find out if you qualify.

What is pension credit?

Pension credit is a government benefit available to people over state pension age who are on a low income.

There are two parts to pension credit:

  • Guarantee Credit – This boosts your weekly income to a guaranteed £201.05 (or £306.85 if you are married or in a civil partnership).
  • Savings Credit – This is only available to people who reached state pension age before 6 April 2016. You can earn up to £15.94 a week (£17.84 for married couples and civil partners). To be eligible for pension savings credit you need to meet a minimum income criteria and have made some savings towards your retirement other than the basic state pension. The less you have in savings, the more credit you could be eligible for.

On top of these two forms of pension credit you may qualify for additional pension credit if you are disabled, are a carer or have to pay certain housing costs such as mortgage interest payments.

Am I eligible for pension credit?

If you have reached state pension age, live in the UK and your weekly income is less than £201.05 if you are single (or £306.85 if you are married or in a civil partnership) you may be eligible for Guarantee Credit.

Even if your income is above those levels you may still qualify for pension credit if you have a severe disability, are a carer or are paying housing costs such as a mortgage.

It is certainly worth applying for it. According to Age UK nearly nine out of 10 claims for pension credit are successful with 2.5 million households receiving some form of pension credit.

The eligibility rules changed slightly for married couples and civil partners in May 2019. To be approved for Guarantee Credit you now either both have to have reached state pension age or one of you can still qualify alone if they are claiming Housing Benefit.

Couples who are not eligible for pension credit under these new rules can both apply for Universal Credit.

If you are in a couple and were already claiming pension credit before the rule change in May 2019 you won’t be affected unless your income changes. Were your income to increase and you stopped qualifying for pension credit you wouldn’t be able to reapply until your partner had also reached state pension age.

How do my savings affect pension credit?

When you apply for pension credit you’ll be asked for details of your savings and investments. This is to calculate how much income you receive from them. If you have less than £10,000 saved it won’t affect your eligibility for pension credit.

Where there is more than £10,000 in savings or investments the government assumes you receive £1 a week for every £500 that you have and that is added into your presumed income before any pension credit is added.

How much is pension credit?

Anyone eligible for savings credit – remember you had to reach state pension age before 6 April 2016 to qualify – can get up to £15.94 a week, or £17.84 for married couples.

Guarantee credit will boost your existing income up to £201.05 if you are single or £306.85 for couples.

How do I apply for pension credit?

You can apply for pension credit up to four months before you want to start receiving it. In practice for most people that will mean you can apply up to four months before you reach state pension age.

You can check what your state pension age is using the government’s calculator.

Pension credit claims can be backdated by up to three months if you have already passed the state pension age.

Call the pension credit claim line on 0800 99 1234 (textphone: 0800 169 0133). They will then take all your details over the phone to fill out an application on your behalf. You will need to tell them:

  • Your bank account details
  • Your national insurance number
  • About your income, savings and investments
  • About any pensions that you have
  • About your housing costs (this includes mortgage, interest payments and service charges)
  • Your partner’s details if you are married or in a civil partnership

Alternatively, you can apply online if you already claim a state pension and no children or young people are included in your claim.

Can pension credit affect other benefits?

If you qualify for pension credit it means you could be eligible for others too. This includes:

  • A free TV licence if you are over 75
  • No council tax (unless you live with others)
  • Warm home discount
  • Housing benefit
  • Cold weather payments
  • Free home insulation and boiler grants
  • Free dental treatment
  • Vouchers for glasses or contact lenses
  • You may also get local discounts such as reduced water bills or phone tariffs.

Image source: Getty Images

About the Author

Ruth Jackson-Kirby

Ruth is a freelance journalist with 15 years of experience writing for national newspapers, magazines and websites. Specialising in savings, investments, pensions and property.

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