Over the last 6 months, we’ve spoken to many residents who weren’t aware they were eligible for Pension Credit. This meant they were missing out on extra money to help with living costs, as well as additional benefits you can sometimes access if you get Pension Credit – like the Winter Fuel Payment.
To make sure you don’t miss out, we asked our adviser, Eleanor, to answer your most frequently asked questions about Pension Credit. This includes other options you can explore if you’re not eligible to claim Pension Credit. Keep reading for her expert advice!
“What is Pension Credit?”
Pension Credit is a means-tested benefit. It’s designed to help people who are over State Pension age and on a low income with their living costs.
Pension Credit has two different parts – top ups or ‘Guarantee Credit’ and ‘Savings Credit’. You could be able to claim one or both parts of Pension Credit.
Guarantee Credit
This part of Pension Credit works like a top up system. It makes sure your income doesn’t go below a certain amount called a ‘minimum income guarantee’. If your income is below this amount, your Pension Credit will top it up to the minimum income level.
The minimum guarantee amount varies depending on your circumstances. Couples claiming Pension Credit are entitled to a higher standard minimum income guarantee amount than single households. In addition, you may be entitled to more Pension Credit or able to claim it for the first time if:
- you get certain other benefits, such as Disability Living Allowance (DLA), Personal Independence Payment (PIP) or Attendance Allowance
- you’re responsible for a child, or you’re a carer
- You have certain housing costs, like leasehold service charges or ground rent
Savings Credit
This part of Pension Credit is available to people who reached retirement age before 6th April 2016. It provides a bit of extra income if you have some savings or your income is higher than the basic State Pension.
For example, if you’re a single person with a weekly income of £227.10, you can get £17.30 in Savings Credit. Just remember that while Savings Credit is not means-tested in the same way, there is an upper income limit.
“Can I get Pension Credit if I have a State Pension?”
Don’t assume you can’t get Pension Credit because you have a State Pension. If your income is below the relevant minimum income guarantee amount, for example if you have a small State Pension, or you haven’t made enough National Insurance contributions to get a State Pension, you can claim Pension Credit to top up your household income to the minimum income guarantee amount.
“I have a private pension, could I still be eligible for Pension Credit?”
This will depend on your individual circumstances. You may be eligible if you have a smaller State Pension or meet any of the other requirements we mentioned above that can increase your top-up amount.
“I have a private pension that I haven’t claimed yet – could I be entitled to Pension Credit?”
The Department for Work & Pensions (DWP) will calculate your income based on all the income that is available to you, so your private pension amount will be factored in even if you aren’t claiming it yet. There are some exceptions, however you are generally expected to use all income available to you.
If you’re over the age of 50 and would like some support to understand your options for claiming your private pensions, you can contact PensionWise for free, confidential advice. Find out more and book here.
“I’m £3 over the weekly limit of £227.10, is it worth applying for Pension Credit?”
It’s still a good idea to complete a benefit check to see if you could be entitled to Pension Credit. Remember that rather than being a fixed amount, it tops up your income to a minimum amount. £227.10 is the standard minimum income guarantee, but circumstances like claiming a disability benefit may increase your minimum limit beyond this amount.
Adviser top tip!
If you think you won’t get much Pension Credit, it could still be worth applying. If you get Pension Credit, you can normally get other benefits like:
- Winter Fuel Payments and Cold Weather Payments
- Council Tax Support
- Free NHS dental treatment, and help with the cost of glasses and transport to hospital
- (Aged 75 and over only!) free TV license
“If I can’t get Pension Credit, does that mean I can’t get other support?”
If you’re not eligible for Pension Credit, this doesn’t necessarily mean you won’t be able to get any other help with your living costs. Here’s just some examples of other financial support you might be able to access:
- Help with your water bills
If you’re finding it difficult to keep up with your water bills, contact South West Water to find out what help you could get. They offer different support, including a reduction to your water tariff if you have a water meter fitted, reducing your water bill.
- Help with housing costs
If you rent your home, you may be able to get money towards the cost of your rent through Housing Benefit or the Housing Element of Universal Credit.
- Council Tax Support
Depending on your circumstances, you may be entitled to a discount on your Council Tax bill. Visit the Plymouth City Council website to find out more.
- Warm Home Discount
This is credit added to your energy account during the winter to help you pay your energy bills. If you live in a home with high energy costs and receive a means-tested benefit, like Housing Benefit, you might be able to get the Warm Home Discount.
- NHS Low Income Scheme
This is a way to get NHS funding towards health costs like glasses, free NHS dentist treatment, transport costs, wigs and fabric supports. Find out more and apply here.
“I get PIP/ DLA/ Attendance Allowance/ Housing Benefit/ Council Tax Support, is my income too high to qualify for Pension Credit?”
Disability benefits and housing costs are not counted as income when the DWP assess your eligibility for Pension Credit. In fact, depending on your circumstance, you may even qualify for a premium that increases your top-up amount.
“Will Pension Credit affect my State Pension/ Housing Benefit/ Council Tax Support?”
No, as it is not counted as income in the same way a pension or earnings from employment are. In some circumstances, Pension Credit can actually increase the rate of Housing Benefit or Council Tax Support you can get.
“I have savings, can I get Pension Credit?”
All savings under £10,000 are completely ignored when calculating your income for Pension Credit.
In addition, having over this amount does not stop you from being eligible for Pension Credit either. Instead, the amount you can get would be reduced by £1 for every £500 increment above the £10,000 limit.
There are some situations where your savings or capital (this is things like shares, bonds and ISAs) are either ignored forever or for a certain amount of time:
- If you received compensation from the DWP for an error they made.
- If you’re planning to use some money for essential household repairs, like roofing or installing a wet room for accessibility.
- If you received compensation from the government.
- If you’re selling your home, money from the sale is ignored for a certain amount of time.
“I’ve reached State Pension age but my partner hasn’t. Could we get Pension Credit?”
You won’t be able to claim Pension Credit until you both reach State Pension age, unless you began your Pension Credit claim before 2019. However, you may be able to claim Council Tax Support or working-age benefits such as Universal Credit (UC) in a joint claim. UC is replacing certain old-style benefits like Working Tax Credits and Income Support, so you may be able to claim UC if you partner used to receive benefits that have now been phased out.
If you and your partner were on a joint claim for Employment Support Allowance (ESA) and you reached State Pension age, this could also trigger entitlement for UC.
“I own my home, can I get Pension Credit?”
You don’t need to be getting housing benefit to claim Pension Credit. In fact, about half of Pension Credit claimants own their home. Your eligibility is based on your income, not your housing status.
As a homeowner, you may still be entitled to the additional top-up amount for specific housing costs.
If you’re struggling to afford mortgage payments, you can access a support for mortgage interest loan, but we recommend that you contact us for advice on your options before taking out the loan.
“Can I backdate my Pension Credit award?”
Yes, you can backdate your award for up to 3 months, and you do not need to give a reason for getting your award backdated.
“I tried to apply for Pension Credit before and I wasn’t entitled to it. Is it worth applying again?”
Yes! There are a few reasons why it’s worth applying again:
- Your circumstances may have changed since you last applied.
- You may not have included information that would have affected your application.
- You may have counted disability benefits as ordinary income when completing your calculation.
Changes like making a new claim for Attendance Allowance, a non-dependent moving out, a partner passing away, or a pension fund ending can all change your entitlement.
“Is it difficult to apply for Pension Credit?”
The application process for Pension Credit is relatively simple, so it may be easier to claim than you think!
To apply, call 0800 99 1234 or visit https://www.gov.uk/pension-credit/how-to-claim.
All you’ll need is your National Insurance number, details of your income, savings and investments and details of the bank account that your State Pension is paid into.
“Can I get help with applying for Pension Credit?”
If you’re worried about completing the application, remember that help is available. You can ask a friend or family member to help you, or contact one of the following for support:
- Us!
- Age UK
- If you rent from the council or from a housing association, your housing officer may also be able to help you
A final word from our Adviser!
With lots of different help out there, it can be difficult to figure out what you’re entitled to. For more information about what support you could be eligible for and how to access it, you can always contact us. There’s lots of information on the national Citizens Advice website. Alternatively, you can visit our website to find out different ways to contact the team here in Plymouth.