Pension Credit - how does it work?

• Pension credit is administered by the Department for Work and Pensions (DWP).

  A lot of pensioners have been put off claiming Pension Credit having heard of the horror stories with tax credits overpayments but in reality claiming the Pension Credit is nowhere near difficult as claiming Tax Credits.

• The Directgov website has some useful information on claiming Pension Credit

• Pension credit is currently available to eligible claimants from the age of 60. But a further consequence of changes to the state pension is that this minimum age will also from 6 April 2010 begin a 10-year phased increase to 65 following the same pattern as for women?s state pensions. Anyone born after 5 April 1950 will be affected and can check what age they will become eligible using the online at state pension age calculator.
• The first £10,000 of savings held by pensioners will not be taken into account for assessment of their entitlement to Pension Credit
• There are two parts to Pension credit: Guarantee Credit (available to pensioners aged 60 and over) and Savings Credit (available to pensioners aged 65 and over). You may claim one part or both parts together depending on your circumstances.

• Guarantee Pension Credit tops up your income to at least £132.60 per week for single pensioners and £202.40 per week for couples. If you are disabled, a carer or if you have certain housing costs you may be entitled to more money.

• Savings Credit provides extra money to those aged 65 and over. It is intended to reward savings so if you have a second pension or modest savings you can get a cash addition of up to £20.52 per week for single pensioners and up to £27.09 per week for couples. Those with incomes up to around £184 per week and couples up to around £270 will qualify for the top up.

• Both parts of Pension Credit look at your income, capital and other circumstances.

• The Pension Credit also:

• Abolished weekly means testing. Those aged 60-65 receive an annual notification in order to confirm their circumstances have not changed. Any changes in circumstances should be notified throughout the year. Those who are aged 65 and over may have an Assessed Income Period of up to 5 years, during this period you do not need to inform any changes in your retirement provision.
• Abolished the rules excluding pensioners with capital of over £12,000 from any help. Savings below £10,000 will not be taken into account and over £10,000 you will be treated as having an extra £1 income for every £500 of capital you hold.
• Protects those on Housing and Council Tax Benefits by increasing the guaranteed amounts you receive as well as permitting you to benefit from the savings rules for Pension Credit.
• Those who receive Guarantee Pension Credit are entitled to full Housing Benefit and Council Tax Benefit as well as free NHS dental treatment, free sight tests and glasses and some other health costs.


• If you would like some more information on Pension Credit can we suggest you have a look at two very useful links:

• Help the aged - Can you claim Pension Credit?
• Age Concern - Factsheet 48 - Pension Credit