Could you benefit from Pension Credit?
- TBA
- Aug 9, 2024
- 3 min read
We previously discussed how National Insurance credits could be purchased to supplement your State Pension. Did you know that there is another way? You may be eligible to apply for Pension Credit.
1. What is Pension Credit?
Pension Credit is a benefit provided by the UK government for people with low income who have reached the state pension age. It mainly consists of two parts:
Guarantee Credit
Savings Credit
According to current rules, only those who reached the state pension age before April 6, 2016, are eligible to apply for the Savings Credit portion of Pension Credit. If you reached state pension age on or after the 6th April 2016, you can only receive the Guarantee Credit portion.
The current state pension age is 66 years, however this is set to increase to 67 soon.
2. How much can I get?
As mentioned, Pension Credit is divided into two parts. You might be eligible for both parts or only one.
To apply for Guarantee Credit, you must have reached the state pension age.
For the 2024-25 tax year, you can receive the following amounts:
Single person: £218.15 per week
Couple: £332.95 per week
To receive Savings Credit, you must have reached the state pension age before the 6th April 2016. The amount you can get depends on your savings and income. If you have some savings or an income higher than the basic state pension, you can receive additional money through Savings Credit. For the 2023-24 year, the maximum amounts are:
Single person: up to £17.01 per week
Couple: up to £19.04 per week
3. What other help can I get?
After applying, you may also be eligible for other benefits.
Medical Expenses
Free NHS dental treatment, glasses, and travel costs to and from the hospital
If you are a carer, you may receive an extra amount of up to £44.60 per week (Carer’s Allowance)
If you are disabled, you may receive an extra amount of up to £81.50 per week.
Housing Costs
You might not need to pay council tax (unless others live with you)
If you are a tenant, your rent might be fully covered by Housing Benefit
If you own your home, you might get help with mortgage interest, ground rent, and service charges
Other Costs
Free TV licence if you are 75 or older
Cold Weather Payment during particularly cold seasons
4. Who can apply?
To apply for Guarantee Credit, you must have reached the state pension age.
For Savings Credit, you must have reached the state pension age before the 6th April 2016. You can apply whether you are still working or retired, as long as you meet the age requirements. You can also apply if you have other income, savings, or own your home.
Pension Credit is specifically for people with low income. Your income will be assessed to decide whether to approve your application, and how much to give you. Your pension savings, any withdrawals from them, and any remaining money will be considered in this assessment.
Under current rules, if your savings or investments (including your pension savings) do not exceed £10,000, it won’t affect the amount you get. If your savings exceed £10,000, the amount may reduce. Every £500 (or part of £500) over £10,000 is treated as £1 per week of income, added to any other income (like a private pension).
5. How do I apply?
If you’re eligible, you can apply four months before you reach the State Pension age, or alternatively when you want to start receiving it.
You can apply online at GOV.UK, or call the application hotline at 0800 99 1234 for assistance.
When applying, you’ll need to provide the following details:
National Insurance number
Bank account information
Details of your income, savings, and investments
Pension information (if applicable)
Housing costs details (e.g., mortgage, interest payments, or service charges), and your partner’s details (if applicable).
Applying will not incur any losses. If anything, it might even yield unexpected benefits. So, we suggest that you give it a try if you’re eligible.
If your application has been unsuccessful before, you can sill apply in the following year. For any further questions regarding your pension arrangements, get in touch with us for a consultation.