Martin Lewis on pension credit: What over-66s need to know
Update 24 September 2024. The Government has announced the Winter Fuel Payment will no longer be universal, now it'll mainly be triggered by claiming Pension Credit, meaning it's even more important to check if you're due it.
It is a national tragedy that getting on for a million pensioners, many of whom have been paying into the system for years, are missing out on a critical boost to their income. It's called pension credit.
So as we're amidst a cost of living crisis, it's crucial we spread the word as quickly as possible, as this payment is worth on average £3,900 a year, and it can have a real impact reducing the physical and mental health risks hitting many on lower incomes.
Pension credit 10-second need-to-knows (spread the word)
Well I say call, actually try www.gov.uk/pension-credit first if you can (I couldn't think of a rhyme for going online...). Though if you aren't comfortable online and prefer to speak to someone, then call the pension credit helpline on 0800 99 1234 (N. Ireland 0808 100 6165) to see if you're due. It's usually open from 8am to 6pm.
I'm NOT saying everyone will be entitled to pension credit; there's huge variance depending on if you've savings, disabilities, and other factors. Yet at this income it's definitely worth spending five minutes to check – far better for more to check and not get, than more to not check when they could get. You CAN get it if you're a homeowner, claim other benefits or live with grown-up family. The worst that can happen is they say no.
- If your total income is under £218 per week (£333 for a couple both pensioners). You are very LIKELY to get pension credit as this is the level of the full state pension it is meant to top up.
- If your income is £218 to £235 per week (£333 to £350 for a couple both pensioners). There’s A CHANCE you will get pension credit, it depends on circumstances, (there’s a higher threshold if you claim certain disability benefits or have caring responsibilities, so if this is you it’s worth checking). In fact in some circumstances you could get it even with higher income, but above these levels, it's much less likely I don't want to give false hope.
What counts as 'total income'? Income from work, pension, state pension, some benefits, and savings/investments over £10,000 (this is counted as £1 a week in income per £500 of savings above £10,000 – if only).
Need help or independent advice? Call the Age UK helpline or contact your local Citizens Advice.
Now the nitty-gritty – what is pension credit?
You could just stop with the info above, but if you want to know more, read on. Pension credit's a naff name, it should be called 'the State Pension Top Up'. Technically it's a means-tested benefit to help those without enough to live off, with two parts:
- Guarantee credit: This tops your income up to at least £218.15 a week for single people or £332.95 a week for cohabiting or married couples of state pension age. The average top-up is £75 a week so that's £3,900 a year.
The reason I say check if you've income under £235 (£350 for couples) is first as you may get more if you've got extra 'responsibilities', such as a severe disability, you're a carer or look after an under 20-year-old, and second because of…
- Savings credit: This applies to the three in four state pensioners who are on the OLD state pension (roughly those aged 72+). It is designed to reward those who saved towards retirement. For each £1 of income (incl savings) you have above £190/wk, you get 60p of Savings Credit, though once you hit £218/wk, your Pension Credit is reduced by 40p for every £1 above (numbers differ for pensioner couples). It's all a bit complex, so just check if you're due.
Pension credit has a superpower... it's a gateway entitlement triggering many other boons
If you're entitled to the guarantee credit element, this also entitles you to a host of other state protections. Here are just some of them:
- Free TV licence for over-75s – worth £169.50. Those over-75s on pension credit can claim a free one for their household.
- Council tax reduction – potentially worth £1,000s a year. Depending on your local authority's rules, this may cover your entire council tax bill.
- Help with heating and energy costs – worth £100s. Pension credit entitles you to the warm home discount, which is a £150 credit on your energy bill, normally given by the end of March. You could also get extra payments in weeks where there is very cold weather.
- Housing benefit for renters – potentially worth £1,000s a year. It isn't a fixed amount, but you could get £100s a month, and even have your rent paid in full.
- Free dental and optical care. You're entitled to free NHS dental care and vouchers for glasses or contact lenses.
- Winter Fuel Payment – worth up to £300. It’s usually between £200 and £300 and is paid automatically to those eligible.
For full information on pension credit, and how to apply, see the MSE pension credit guide.
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Martin Lewis on pension credit: What over-66s need to know
24 September 2024![]()
Nearly a million pensioners are missing out on pension credit, a vital benefit worth £1,000s a year for many, which tops up your income. -
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