Pension Credit: the benefit too many are missing out on

Pension Credit is a benefit for those over the state pension age that is worth, on average, £75 per week or £3,900 per year. Around 2.2 million pensioner households are eligible for this income boost – yet it’s estimated that almost one million have not claimed it!

Whether it’s a lack of awareness about their entitlement or simply struggling to fill in the form, so many UK pensioners are not receiving the support they need. Those missing out are often the poorest – who may have been paying into the system for years yet are now facing serious financial hardship in the cost of living crisis.

Many consumer champions, including Martin Lewis of MSE, have been trying to raise awareness of Pension Credit for many years. He and others think that there needs to be more proactive intervention from the government, such as reaching out to likely candidates who are not getting full state pensions.

For now, it is up to citizens to make sure they or those they love are receiving the full financial support they are entitled to. The loss of £300 Winter Fuel Payment and Winter Fuel Allowance combined with the 10% hike of the Ofgem price cap means that things will be tough for low-income pensioners this winter. So whether it’s for yourself or someone you know, make sure you read up on eligibility and how to apply for Pension Credit.

What is Pension Credit?

Pension Credit is a benefit aimed at people who are already over state pension age, have paid National Insurance or made savings for their retirement, but could do with a further top-up to their income.

There are two parts of Pension Credit. Some people may not qualify for both. But even if you only qualify for one, you will be due extra money.

Guarantee credit. The main part of pension credit give those who qualify a top-up of their weekly income to a minimum guaranteed level as well as discounts on other bills. If you’re single, you’ll be entitled to £218.15 a week – and it’s £332.95 if you’re in a couple.
Savings credit. Not everyone will qualify for the weekly top-up but those who have saved for retirement via savings, work or a private pension can still claim a boost of up to £17.01 a week if you’re single or £19.04 if you’re in a couple.

How do you find out if you’re eligible for Pension Credit?

Checking if you’re eligible for Pension Credit is really straightforward – you can just call the Pension Credit helpline service or use the Government’s free Pension Credit calculator.

If you want an idea of how likely you are to qualify, there are some key rules:

You must live in the UK.
You must be of state pension age – and if you’re in a couple, this goes for both people.
For single people: if your total weekly income is under £235 then you could qualify – if it’s less than £218 then you almost certainly will.
For couples the threshold is slightly higher: if you are both of state pension age and your total weekly income is under £359 then you could qualify – and if it’s less than £333 then you are very likely to get it.
To qualify for savings credit only, you have to have reached state pension age before April 2016 and earn above a threshold amount of £189.80 if you’re single, and £301.22 if you’re in a couple.

If you’re claiming benefits related to disability or caring responsibilities there’s a higher income threshold to qualify for Pension Credit – but if you have an income of roughly under £350 a week you should absolutely check what you are entitled to.

How do you claim Pension Credit?

A big factor in the under-claiming of Pension Credit is the fact that it’s not automatic. Currently, you cannot expect to be contacted by DWP or another government body, letting you know that you are entitled to the benefit and ensuring that you are receiving it.

Instead you must apply yourself via the following routes:

Submitting an application via Gov.uk – if you’ve already claimed your state pension.
Phoning the Pension Service on 0800 99 1234 (or the Northern Ireland Pension Centre on 0808 100 6165). If you call they will fill in the application form for you.
Submitting a paper application. So in the case that you’re unable to make a claim online or by phone, you can get a friend or family member to call the helpline to request them to send you a paper application.

The earliest you can start your application is four months before you reach state pension age. After that, you can claim anytime – but your claim can only be backdated for three months.

To apply, you’ll need to supply the following information:

Your national insurance number
Information about your income, savings and investments
Your bank account details

For couples, one partner applies and then provides income and savings details for both partners. And it’s important to note that you do not have to be married or in a civil partnership – you will be considered a couple as long as you live together.

Other benefits

Even if you find out you’re only entitled to a small amount of Pension Credit, there are a whole variety of other benefits that you’ll also be entitled to. These include:

Council tax reduction

If you successfully apply for the guarantee credit part of Pension Credit, you’re entitled to the maximum council tax deduction. If you get the savings credit part of Pension Credit, you might also be eligible for some discount on your council tax. (To apply for a council tax reduction, you’ll need to get in touch with your council.)

Warm Home Discount

The Warm Home Discount is a credit on your energy bill given to people on low incomes. If you receive Pension Credit and live in England or Wales you’ll automatically get the rebate, but you need to be signed up with a supplier who is part of the scheme. Others, including those on savings credit, or living in Scotland, will need to apply.

Cold Weather Payments

If you qualify for either kind of Pension Credit you will be eligible for Cold Weather Payments. This benefit is awarded for each continuous seven-day period of very cold weather (0°C or below) between 1 November and 31 March. The money, potentially worth £25 per week, will be paid automatically.

A free TV licence

If you’re claiming Pension Credit (either guarantee or savings credit), you’re entitled to a free TV licence each year. (To claim a free licence you simply apply via the TV Licensing website or by calling the TV Licensing helpline on 0300 790 6117 and request an application form.)

Free home insulation and boiler grants

Anyone receiving some or all parts of Pension Credit may be able to get free cavity wall and loft insulation, or even a grant for a new boiler, from their energy provider.

Discount on bills

Many suppliers of utilities and broadband services offer discounts to those who receive Pension Credit.

See your local water board’s website for what offer they may have. For Pension Credit broadband deals see MSE’s Broadband for low income families.

Housing Benefit

If you rent and receive any amount of guarantee credit, you’ll be eligible for the maximum Housing Benefit – which can be £100s a month, or even the full cost of your rent! Those who receive savings credit but not guarantee credit, may also get some help towards rent.

You should be asked if you also want to claim Housing Benefit when you apply for Pension Credit- and if not, simply contact your local authority to apply.

Hospital travel expenses

If you get the guarantee portion of Pension Credit, you can get help with the expenses of travelling to hospital if you’ve been referred by your GP or other health care professional. This can include the travel costs of a companion if you need someone to come with you.

Free NHS dental care

If you get any amount of guarantee credit, you’re entitled to free dental treatment on the NHS. All you have to do is sign a declaration form when you visit your dentist.

Voucher for glasses/contact lenses

Qualifying for guarantee credit entitles you to a voucher for glasses or contact lenses. You’ll have to request a form for the voucher when you have your eye test.

Apply now!

With so many additional benefits, anyone who thinks that they or their loved one may be in with a chance of claiming Pension Credit should absolutely try.

Call the Pension Credit helpline service or apply online.

There is more information on eligibility and how to claim on the Pension Credit page of Gov.UK.

If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk.