What is Pension Credit?
Pension Credit is a UK benefit designed to help people over the State Pension age who have a low income or limited savings. Its main purpose is to boost the weekly income of pensioners who may not have enough to cover essential living costs, such as food, bills, and housing. If you’re struggling financially after retirement, Pension Credit could make a significant difference to your standard of living.
There are two main parts to Pension Credit:
Guarantee Credit: This is the core element and tops up your weekly income to a minimum level set by the government. If your income is below this threshold, Guarantee Credit makes up the difference.
Savings Credit: This is an extra payment for people who reached the State Pension age before 6 April 2016 and who have made modest savings or have a small private pension. If you reached State Pension age on or after this date, you will not be eligible for Savings Credit.
Pension Credit is a means-tested benefit, which means your income and savings are assessed to determine how much support you can get. It’s available whether you own your home or rent, and you can claim it even if you have savings, although the amount you receive may be affected.
Pension Credit fits within the wider system of benefits that support people in retirement. It can also have a positive impact on your eligibility for other financial help. For example, receiving Pension Credit can entitle you to additional support such as help with Council Tax, Housing Benefit, free NHS dental treatment, and a free TV licence if you’re over 75.
For a detailed overview of how Pension Credit works, including current statistics and eligibility rules, you can read the Pension Credit briefing from the House of Commons Library. If you want to understand more about the rules around retirement age and how it affects eligibility for benefits, the State Pension age explanatory notes provide authoritative guidance.
Understanding how Pension Credit interacts with other benefits and sources of income is important, as it can affect the amount you receive and your entitlement to further support. To see how Pension Credit fits into the broader context of UK benefits law and what other help may be available, visit our page on benefits.
Who Can Claim Pension Credit?
To claim Pension Credit, you must meet certain eligibility requirements based on your age, income, savings, and where you live. Understanding these criteria can help you decide if you should apply and what type of Pension Credit you might receive.
Age and Income Criteria
You must have reached State Pension age to claim Pension Credit. Currently, this is 66 for both men and women, but it may change in the future. Pension Credit is designed to support people on a low income, so your weekly income and savings are important factors. Generally, if your income is below a set threshold, you may qualify for help.
Residency Requirements
You need to live in the UK and be habitually resident here to claim Pension Credit. This means the UK must be your main home, and you must not be subject to immigration control (unless you qualify under special rules).
Guarantee Credit vs Savings Credit
Pension Credit has two parts:
Guarantee Credit: This tops up your weekly income to a minimum level set by the government. Most people who qualify for Pension Credit receive this part. You may be eligible if your income is below the threshold and you have reached State Pension age. More details on the Eligibility criteria can help you understand if you meet the conditions for Guarantee Credit.
Savings Credit: This is an extra payment for people who saved some money towards their retirement, for example through a personal or workplace pension. However, only those who reached State Pension age before 6 April 2016 can claim this part. If you reached State Pension age after this date, you will not be eligible for Savings Credit.
Income and Savings Limits
Your income includes money from pensions, benefits, earnings, and most savings. While there is no strict upper limit on savings, if you have over £10,000 in savings or investments, this will affect how much Pension Credit you get. The less you have, the more likely you are to qualify.
How to Check If You Qualify
It’s not always easy to know if you meet all the criteria, especially if your circumstances are complicated. To get a personalised answer, you can check what benefits you can get. This tool will help you explore your eligibility for Pension Credit and other support, taking into account your age, income, savings, and living situation.
For more detailed information, you can also refer to Pension credit advice | Age UK or review the official State Pension Credit Act 2002 – Explanatory Notes.
If you’re unsure or need tailored advice, it’s a good idea to seek guidance before applying. This ensures you understand your entitlement and don’t miss out on support you could be receiving.
How Pension Credit Works
How Pension Credit Works
Pension Credit is a benefit designed to help people over State Pension age with their living costs by topping up their weekly income to a minimum guaranteed level. It is made up of two parts: Guarantee Credit and Savings Credit. Depending on your circumstances, you may be eligible for one or both components.
Guarantee Credit
The main part of Pension Credit is called Guarantee Credit. It ensures your weekly income does not fall below a set amount, which is reviewed each year by the government. If your income is below this threshold, Guarantee Credit will make up the difference. This means that even if you have little or no income from pensions or savings, you can still receive financial support.
For a detailed explanation of how Guarantee Credit is calculated and who can claim, see the Guarantee Credit section in Age UK’s factsheet. This resource explains how your income is assessed, what counts as income, and how certain types of capital or savings may affect your entitlement.
Savings Credit
Savings Credit is an extra payment for people who have made modest savings towards their retirement, such as through a personal or workplace pension. However, you can only get Savings Credit if you reached State Pension age before 6 April 2016. The amount you receive depends on how much you have saved and your total income.
To find out if you qualify for this part of Pension Credit and how much you could receive, visit the Savings Credit section on GOV.UK. This page provides clear eligibility criteria and further details about how Savings Credit works.
How to Claim Pension Credit
You can apply for Pension Credit online, by phone, or by post. The quickest and easiest way is usually by phone, where you can get help with your application. When applying, you will need to provide information such as:
Your National Insurance number
Details of your income, savings, and investments
Information about your pensions (if any)
Details about your partner, if you have one
If you need assistance, someone else can make the claim on your behalf, provided you give them permission.
How Payments Are Made
Pension Credit payments are made directly into your bank, building society, or credit union account. The benefit is usually paid every four weeks in arrears, although you may be able to arrange for more frequent payments if needed.
Once your claim is approved, you will receive a letter explaining how much you will get and when your payments will start. If your circumstances change, such as your income or savings, you should inform the Pension Service as this may affect your entitlement.
Understanding how Pension Credit works can help you make the most of your retirement income. For more information about related benefits and support, explore our other guides on benefits for older people and managing your finances in retirement.
How Pension Credit Affects Other Benefits
Receiving Pension Credit can have a significant impact on your entitlement to other benefits, often increasing your overall support and making it easier to qualify for additional help. Understanding these interactions is essential to ensure you’re not missing out on valuable financial assistance.
Housing Benefit
If you qualify for Pension Credit, you may also be eligible for Housing Benefit](https://www.legislation.gov.uk/uksi/2006/214/contents), which can help with rent payments. The rules for Housing Benefit differ once you reach State Pension age, as set out in the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006. In many cases, getting the Guarantee Credit part of Pension Credit means you can receive the maximum eligible amount of Housing Benefit, reducing your housing costs substantially. For further details on how Pension Credit can help with your rent or service charges, visit our [help with housing page.
Council Tax Reduction
Pension Credit can also improve your entitlement to Council Tax Reduction, which lowers the amount of council tax you need to pay. In Scotland, for example, the Council Tax Reduction (State Pension Credit) (Scotland) Regulations 2012 provide specific rules for people who have reached the qualifying age for state pension credit. If you receive the Guarantee Credit part of Pension Credit, you may get your council tax bill reduced to zero, depending on your circumstances.
Other Means-Tested Benefits
Receiving Pension Credit may make you eligible for other forms of support, such as free NHS dental treatment, help with NHS prescription charges, and Cold Weather Payments. It’s important to check each benefit’s rules, as Pension Credit is often a qualifying benefit that unlocks further help.
Differences from Universal Credit
Pension Credit and Universal Credit are both means-tested benefits, but they serve different age groups and have different rules. If you or your partner have reached State Pension age, you cannot usually claim Universal Credit. Instead, Pension Credit is designed to top up your income if you are over State Pension age. Understanding which benefit applies to your situation is crucial, so see our Universal Credit page for a detailed comparison.
Claiming Alongside Other Benefits
Some benefits can be claimed at the same time as Pension Credit, without affecting your entitlement. For example, Attendance Allowance is a non-means-tested benefit for people over State Pension age who need help with personal care due to illness or disability. It does not reduce your Pension Credit and may even increase the amount you receive.
If you have a disability, you might also be entitled to additional disability benefits such as Personal Independence Payment (PIP) or Disability Living Allowance (DLA). These benefits can be paid alongside Pension Credit and may increase your total income.
If you are caring for someone for at least 35 hours a week, you may be eligible for Carer’s Allowance. However, receiving Carer’s Allowance can affect the amount of Pension Credit you get, so it’s important to get advice on how these benefits interact.
Maximising Your Income
Because the rules around Pension Credit and other benefits can be complex, it’s important to review your entitlements regularly. Changes in your circumstances, such as moving home, starting to care for someone, or developing a health condition, can all affect what you can claim. By understanding how Pension Credit interacts with other benefits, you can make sure you’re receiving all the support you’re entitled to. If you’re unsure, seek advice or use an independent benefits calculator to check your situation.
Additional Support and Related Benefits
If you’re receiving Pension Credit, you may also be entitled to other types of support that can help with everyday costs and improve your quality of life. Many pensioners find that combining Pension Credit with additional benefits makes a real difference, especially when dealing with specific needs such as mobility, housing, or caring responsibilities. Here’s an overview of some of the most valuable forms of support you might want to explore:
Help with Transport Costs
Getting out and about can be expensive, but there are schemes designed to make travel more affordable for older people. If you need assistance with travel to medical appointments, shopping, or social visits, you may qualify for help with transport costs. This can include free or discounted bus passes, travel vouchers, or support for those with mobility challenges. These savings can complement your Pension Credit by reducing your day-to-day expenses.
Housing Adaptations and Disability Adjustments
If you have a disability or your needs have changed as you get older, you might be entitled to support with making your home safer and more comfortable. Grants and local authority schemes can help pay for adaptations like stairlifts, accessible showers, or ramps. To learn more about what’s available and how to apply, visit our guide to disability adjustments. These adaptations can help you live independently for longer and may be provided alongside your Pension Credit.
Support for Carers
If you care for someone with a disability or health condition, you could be eligible for Carer’s Allowance. This benefit is designed to support unpaid carers and can be claimed in addition to Pension Credit, although your total income may affect the amount you receive. For a detailed explanation of eligibility, rates, and how to apply, check out the Carers Allowance page from Age UK. Even if you already receive Pension Credit, it’s worth checking if you qualify for extra help as a carer.
Bereavement Benefits
Losing a loved one can cause financial strain as well as emotional distress. If you’re recently bereaved, you may be able to claim bereavement benefits, which provide financial support during a difficult time. These payments can help with funeral costs or ongoing living expenses. For a full overview of what you can claim and how it works, visit the Bereavement Benefits guide from Age UK.
Extra Help for Families
Some pensioners have children or grandchildren living with them, or may be responsible for younger family members. If this applies to you, there may be additional support available. You can find out more about benefits for families, including Child Benefit and other forms of assistance, by visiting our help if you have children page.
By exploring these related benefits and sources of support, you can make the most of your entitlements and ease financial pressures. If you’re unsure about what you can claim or how different benefits interact with Pension Credit, it’s always a good idea to seek advice or use an online benefits calculator. Remember, claiming one benefit can sometimes increase your entitlement to others, so it’s worth checking all your options.
How to Apply for Pension Credit
Applying for Pension Credit is a straightforward process, and you can choose the method that suits you best – online, by phone, or by post. Before you start, it’s a good idea to check what benefits you can get to make sure you’re eligible for Pension Credit and any other support you may be entitled to.
Step-by-Step Guide to Applying
1. Apply Online
The quickest way to apply for Pension Credit is online through the official government website. You’ll be guided through the necessary steps and can save your progress if you need to return later.
2. Apply by Phone
If you prefer to speak to someone, you can call the Pension Credit claim line. The adviser will ask you questions and fill in the application for you over the phone.
3. Apply by Post
You can request a paper application form by phone or download one from the government website. Once completed, send it to the address provided on the form.
Information and Documents You’ll Need
To avoid delays, gather the following information before you start your application:
Your National Insurance number
Details of your income, savings, and investments
Information about your pension (if you have one)
Details of your bank or building society account
Information about your partner, if you have one (including their income and savings)
Evidence of housing costs, such as rent or service charges
Having these details ready will make the process smoother and reduce the chance of your application being held up.
Tips to Prepare Your Application
Double-check all the information you provide to ensure it’s accurate.
Provide copies of documents if you’re sending your application by post – never send originals unless specifically asked.
Make sure your contact details are up to date so the Pension Service can reach you if they need more information.
If your circumstances change after you apply (for example, your income or living situation), let the Pension Service know as soon as possible.
Getting Help with Your Application
If you need support at any stage, help is available. You can ask a trusted friend or family member to assist you, or get advice from organisations experienced in benefit applications. For detailed guidance on the application process, Age UK provides step-by-step information and practical advice tailored to older people.
For more general guidance about applying for benefits, including what to expect and how to prepare, visit our benefits page.
Taking these steps will help ensure your Pension Credit claim goes as smoothly as possible, giving you access to the financial support you are entitled to.
Frequently Asked Questions about Pension Credit
Frequently Asked Questions about Pension Credit
Pension Credit can make a real difference to your income in later life, but many people are unsure about how it works, who qualifies, and how it affects other benefits. Below, we answer some of the most common questions to help you understand your options and get the support you’re entitled to.
Who can claim Pension Credit?
To qualify for Pension Credit, you must live in England, Scotland, or Wales and have reached State Pension age. If you have a partner, both of you must have reached State Pension age, or one of you must be receiving Housing Benefit for people over State Pension age. Your income and savings are also taken into account when you apply.
How is my income assessed for Pension Credit?
When you apply, the Department for Work and Pensions (DWP) will look at your weekly income. This includes your State Pension, other pensions, most social security benefits, and earnings from employment or self-employment. Some income, like Attendance Allowance and Personal Independence Payment (PIP), is not counted. If your income is below a certain threshold, Pension Credit can top it up.
Are there savings or capital limits for Pension Credit?
There is no strict savings limit, but if you (and your partner, if you have one) have over £10,000 in savings or investments, it may affect how much you get. For every £500 (or part of £500) over £10,000, the DWP adds £1 per week to your income when working out your entitlement.
How much could I get?
Pension Credit is made up of two parts: Guarantee Credit and Savings Credit. Guarantee Credit tops up your weekly income to a minimum level set by the government. Savings Credit is an extra payment for people who saved some money towards their retirement, but it’s only available to those who reached State Pension age before 6 April 2016. The exact amount you receive depends on your individual circumstances.
Will claiming Pension Credit affect my other benefits?
Receiving Pension Credit can increase your entitlement to other help, such as Housing Benefit, Council Tax Reduction, free NHS dental treatment, and help with heating costs. Pension Credit itself does not reduce your State Pension or most other benefits, but it’s always a good idea to check how it might interact with your current support.
Can I still work and claim Pension Credit?
Yes, you can work and still claim Pension Credit, but your earnings will be included as part of your income assessment. Certain types of income, such as some disability benefits, are not counted.
What if I have a partner?
If you live with a partner, you must claim Pension Credit as a couple. Your combined income and savings will be assessed together. Both of you must have reached State Pension age, unless one of you is already receiving Housing Benefit for people over State Pension age.
Where can I get more help and advice?
If you need more detailed guidance or want to explore other forms of support, visit our benefits page for further information. For a personalised assessment of what you might be entitled to, use our check what benefits you can get tool.
Understanding your Pension Credit entitlement can be complex, but making a claim could boost your income and unlock further support. If you’re unsure about your eligibility or how other benefits might be affected, don’t hesitate to seek advice or use our online tools to get started.
