Pension Credit: what is it and am I eligible?

If you’re over State Pension age, you could be getting help with your living costs by claiming Pension Credit, worth £3,900 a year, on average. 

It’s not a small number that need it either – more than a third of those taking a pension have an income that’s so low they could be entitled to Pension Credit. 

It’s often described as a ‘gateway benefit’, meaning it opens up more help such as a free TV Licence if you’re over 75 or, in some cases, free prescriptions. 

Financial adviser and money coach Claire Sweet says: “Pension Credit is a useful way to top up your State Pension, especially if, for example, you didn’t qualify for a full pension in your own right and are now widowed. 

“You shouldn’t feel hesitant to claim: you or your spouse have paid tax and National Insurance over the years and now it’s time to claim what you’re entitled to.” 

What is Pension Credit? 

Pension Credit is designed to top up your income if you’re over State Pension age (currently 66, but going up to 67 by 2028) and on a low income.  

Figures show that in 2021/22 around 800,000 households were missing out on the benefit, despite campaigns from the Department of Work and Pensions (DWP) to try and increase this.  

In the latest DWP figures, it says “an estimated 63% of families who were entitled to Pension Credit received it” - a similar figure to 2019, showing understanding of eligibility isn’t increasing. 

Many people are missing out on Pension Credit because they think they’re ineligible due to having savings or owning their home.

With prices remaining high, it’s crucial to understand all the help available to you, even if you’ve never claimed a benefit in your life and are thinking 'this doesn’t apply to me’. 

“A successful claim could be life-changing, giving people the confidence to eat well and keep their heating on in the colder months,” says Caroline Abrahams, Charity Director at Age UK. 

How much is Pension Credit and who is eligible? 

Pension Credit tops up your income to ensure you have £218.15 a week, if you’re single, or £332.95 (between you), if you’re in a couple.  

In certain circumstances, you could be entitled to more: 

• If you have a severe disability, you could get an extra £81.50 a week if you receive Attendance Allowance, the daily living component of Personal Independence Payment (PIP) and some other benefits.
• If you get Carer’s Allowance or Carer Support Payment, you could be entitled to an extra £46.50 a week.
• If you’re responsible for someone under the age of 20 you could get an extra £66.29, or more in some cases. 

You could also get help to cover your housing costs. For example, this will apply if you’re in a leasehold property and need to pay ground rent or service charges – it depends on the costs you’re facing with your housing, with full details (and where they apply) available on the gov.uk website. 

If you have £10,000 or less in savings and investments, this won’t affect your Pension Credit, but every £500 over that counts as £1 of income each week, potentially reducing the top up you receive. 

The top up and any extra payments you are entitled to may be referred to as ‘Guarantee Credit’. You may also see reference to ‘Savings Credit’, where if you reached State Pension age before 6 April 2016, you could get an extra £17.01 a week, if you’re single, or £19.04 in a couple. 

This latter benefit is designed to help those who have saved for their retirement and can be claimed with Guarantee Credit or on its own. It’s available if you have a weekly income at least £189.80 (if single) or £301.22 a week (as a couple). 

It can get a little tricky to understand all the nuances of Savings Credit, so calling The Pension Credit Claim line (also known as the Pension Credit contact number) on 0800 99 1234 is a good idea if you’re struggling with any element. 

You can also use the UK Government’s online calculator or the Age UK benefit calculator to get a full idea of what you’re eligible for – have any details of your recent income and your National Insurance number to hand to get the most accurate figure. 

How do I claim Pension Credit? 

There are three main ways to apply for Pension Credit: online, over the phone or by printing out the relevant forms and posting them. If you’re planning ahead, you can start your application up to four months before you reach State Pension age. 

Although some people find filling in forms daunting, the application process should be easy – and won’t take too long.  

Wendy Alcock, Communications Manager at benefits advice service entitledto, says “If you’re wondering whether you’d be entitled to Pension Credit, the easy and free-to-use benefits calculator on the Age UK website will tell you whether you’re entitled to Pension Credit. 

“[It will] also signpost you to other benefits, depending on your personal circumstances. Any information you put in there is anonymised, so it won’t be shared with anyone.” 

Don’t be put off by thinking you’ll have to fill in lots of tricky forms. “The Government has tried to make it as easy as possible to claim and there’s an enquiry line [mentioned above] where you can get help making your application – the number is 0800 99 1234,” says Alcock. 

“The quickest way is to apply online, but you can also do it over the phone if you have your National Insurance number ready. You’ll also need details about your income, whether that’s a State or private pension – or income if you’re still working - as well as any savings you have.” 

A friend or family member can call for you if you’re not able to. If you’d rather apply by post, print out and fill in the Pension Credit claim form. 

Age UK can also help you fill in the forms you need to claim and has a free advice line to help you check you’re receiving all the support you need. Call 0800 169 65 65 to speak to an adviser. 

“It doesn’t take long to fill in the forms as long as you have all your details together,” says Alcock. “Remember that any change of circumstances that affect your income could mean you become eligible, for example if you reduce your hours at work, you stop working or if you have a particular pension that only paid out for a certain number of years.” 

What other benefits could Pension Credit open up? 

“A lot of people don’t realise that Pension Credit is a ‘gateway benefit,’” says Alcock. “Not only does it top up your income, but it entitles you to other help too.” 

So even if you’re only entitled to a small amount it can open up access to other support. This includes: 

• Housing Benefit to help pay your rent (between 2021 and 2022, only an estimated 79% of pensioners who were entitled to this benefit received it).
• Cost of Living Payments, which are paid on top of your benefit. You don’t need to apply for these as they’ll be paid automatically if you’re entitled to them. 
• Support for Mortgage Interest (SMI) for homeowners, which is a loan you’ll need to repay with interest when you sell or transfer ownership. 
• Help with your heating costs through the Warm Home Discount Scheme, which is paid directly to your supplier. The scheme for 2024 reopens in October, although isn't available in Northern Ireland.
• Council Tax discount, which is available in England and Wales only. 
• A free TV licence if you’re aged 75 or over, which will save you £169.50 a year. 
• Help with NHS prescriptions and other health costs including dentists and glasses. 
• A discount on the Royal Mail redirection service if you’re moving house. For example, a single adult gets a concessionary price of £22.50 for three months of redirected post instead of £39.50, or £60 for the full year (instead of £84).