Do we risk losing our Guaranteed Pension Credit?

By Annie Shaw , Tuesday 5 March 2013

Saga Magazine’s award-winning money writer Annie Shaw deals with another reader’s personal finance dilemma:
Sharpen up your selling techniques onlineDo Premium Bonds savings affect your standing with the Pensions Department?

Q: My husband and I are both on Guaranteed Pension Credit and are extremely grateful to receive it. We have always lived very carefully and frugally. From time to time, when we have managed to save some money, we have purchased Premium Bonds, as a safe haven, and very occasionally have won a £25 prize, which we have re-invested.
We would like to know if this will jeopardise our standing with the Pensions Department if the total reaches more than about £15,000.
We have not had funds from any other source, the bonds have only been purchased from a small excess of an occasional benefit payment.

We would hate to have to cash in the Premium Bonds, but will do so if your reply indicates that the Pensions Department would cancel our Guaranteed Pension Credit - we could not live without it.

A: When you were awarded Pension Credit you would have been given an “assessed income period”. This means that during the time stated (normally any time up to 5 years) you do not need to report to the Department of Work and Pensions any change in your circumstances.

Unfortunately you do not say how old you are. People who are over 75 may be given an indefinite assessed income period, meaning they will probably never be re-assessed. Everyone else will be re-assessed at the end of the period they have been allocated and are legally obliged to disclose how much they hold in savings.

It doesn't matter where the money is invested (be it in Premium Bonds, a savings or a current account, or even under the mattress), if you have more than £10,000, then for every £500 (or part thereof) you have above this threshold, the DWP adds £1 to your weekly income figure. So, when your Pension Credit comes up for reassessment, if you have £15,000 worth of savings in whatever form you will be judged to have an additional £10 a week (£5,000 – the difference between the amount of your savings and the threshold of £10,000  allowed – divided by £500 = 10) and this will impact your Guaranteed Pension Credit amount.

There’s a table here showing how capital you hold may be treated as “deemed income” when Pension Credit is being assessed.

If you are finding it hard to make ends meet you should check that you are receiving all the benefits that you are entitled to. Call in at your local Citizen's Advice centre or contact Turn2Us, which can help you calculate if there is anything else you might get.

* Read Annie Shaw's money articles every month in Saga Magazine.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.


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  • Adam shaw

    Posted: Friday 31 January 2014

    I've recently been made homeless by my mum I have a new born child and my girlfriend who's at collage, I work full time. My Nannan has said we could live there but would she loose her pension credit has she owns her own property ? Please help me

  • Shirley McArdle

    Posted: Tuesday 10 December 2013

    I presently receive pension credit, I have been offered 10 hours work every per month, would this affect my pension credit? and would I have to inform the DWP?

  • jo johnson

    Posted: Tuesday 10 December 2013

    Ive been forced by several years of post accident problems and being unable to work since 60 yrs old to let my house and live with family as the only category not to have morgs paid above 100k are pensioners if you are unfortunate to need what we have paid ror since the welfare state started,this led me to debts and out of £550 per month paying morg of 420 leaving me little to live on yet gov can dish out money to new immigrants,the worlds highest foreign aid ,family allowanc to polish children

  • J simmons

    Posted: Friday 18 October 2013

    We have lost our guaranteed pension on my husband reaching retirement age. He has carers allowance for looking after me. We now have to pay for dental, council tax etc. can he drop the carers would would it be made up with pension credit which would put us back on guaranteed pension credit

  • j morris

    Posted: Friday 16 August 2013

    Do I have to report to pension credit if my savings go down.

  • Jan Eves

    Posted: Monday 29 July 2013

    I am 65 and iam exspecting an inheritance of £3000, is this included as savings re: guaranteed pension credit.

  • John Ohara

    Posted: Wednesday 03 July 2013

    We are thinking of selling our house, we get pension and pension credit. Does anyone know if earmarked capital from house sale can be used to buy A, a motor home or B, a boat, either would be our residence, we may also rent a flat. The DWP website merely states disregarded earmarked capital must be used to provide another home. It doesn't say what, but does mention "tents" possible help with site fees, but not utilities.
    Many thanks

  • Keith Davies

    Posted: Tuesday 25 June 2013

    I am being made redundant at the end of June 2013.
    I am 63, married and once redundant will not have any income.
    My redundancy money will take our savings up to £35,000 and based on that I believe some pension credit will be allowed to me.
    I also have 3 personal/works pensions, current value of £130,000 but these will not be accessed until I am 65.
    Will these pensions affect my pension credit claim even though I have no income from them?


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