850,000 families don’t apply for pension credit – are you missing something?

Up to 850,000 families could miss a pension credit worth an average of £1,900 a year.

A new report from the Department for Work and Pensions (DWP) has revealed that a total of £1.7billion in pension credit was unclaimed in the 2019/20 financial year.

Here, which one? explains how the pension credit works and offers tips on how to claim if you qualify.

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What is the pension credit?

Pension credit is a weekly benefit that gives you extra money to help cover your living expenses if you are over the statutory retirement age (SPA) and have a low income. It is also a gateway to other benefits such as council tax support and cold weather payments.

The pension credit has two components: the guarantee credit and the savings credit. You may qualify for one or both.

Only people who reached the SPA before April 6, 2016 can claim the savings loan. If you reached SPA on or after April 6, 2016, you can still get warranty credit.

Even if you’re only entitled to a few pounds, it’s still worth claiming as it can help you get other benefits.

Guarantee credit

Guarantee Credit tops up your weekly income to a guaranteed level of £177.10 for singles and £270.30 for couples in financial year 21/22.

This will ascend at £182.60 for a single person and £278.70 for a couple from April.

You must have reached SPA for this benefit – which is currently 66 for both males and females.

To qualify, you must live in the UK and be of the age of eligibility for pension credit (as for SPA). The amount you will receive depends on your income.

Couples are only eligible for Guarantee Credit once they have both reached SPA. If you’re in a relationship and don’t qualify for Guaranteed Credit, you can both apply for Universal Credit instead.

If you were already receiving a pension credit before May 15, 2019 and you are in a relationship, you can continue to receive it regardless of the age of your partner.

If you are a caregiver, have a severe disability, or have certain housing costs, you may qualify for a higher level of collateral credit.

Savings loan

The savings loan provides you with additional money if you have planned part of your retirement by saving or by contributing to a pension other than the basic state pension.

The additional income can reach £14.04 per week for a single person or £15.71 for married couples and civil partners. The rates will drop to £14.48 and £16.20 respectively from April.

To qualify, you must have a minimum income of £153.70 per week if single, or £244.12 per week for a couple.

  • Learn more:pension credit explained

One-third of eligible people do not apply for pension credit

The DWP says only two-thirds (66%) of those eligible to claim in the 2019/20 financial year did so.

The demand for guarantee credit was 73%, a figure significantly higher than the 43% recorded for savings credit.

The DWP said this disparity could be influenced by the difference in the average weekly amounts people were entitled to.

The estimated average weekly unclaimed amount for Guarantee Credit was £57, but for Savings Credit it was just £6.

Those under 75 were more likely to claim a pension credit (68%) than those over 75 (65%).

  • Learn more:how much state pension will i get

The pension credit, a “gateway” to benefits

The pension credit serves as a gateway to other advantages. Here are some of the benefits you may be entitled to if you are eligible for the pension credit:

  • Cold Weather Payments: If the temperature in your area drops below freezing for seven or more consecutive days between November 1 and March 31, you receive a payment of £25 for each week of cold weather.
  • NHS costs: such as prescriptions, dental treatments, eyeglasses and transportation costs for hospital appointments.
  • TV license: if you are 75 or older.
  • Housing allowance: if you rent the accommodation in which you live.
  • Payment of mortgage interest: if you own your home, you can get help with ground rent, service charges and mortgage interest.
  • Municipal tax assistance: You may be eligible, but the amount you receive will depend on the criteria set by your local council.

Find out how much you can claim

The government pension credit calculator can help you verify your eligibility for the pension credit.

It will give you an estimate of any pension credit payments due to you based on your income, benefits, pensions, savings and investments.

  • Learn more:retirement age calculator

How to apply for pension credit

You can apply up to four months before becoming eligible for pension credit.

If you apply after reaching the legal retirement age, your application can only be backdated by three months.

If you’ve ever been turned down because of your savings, it’s worth taking a look, as your circumstances may have changed.

There are three ways to apply, online, by mail or by phone.

You will need the following information:

  • Your national insurance number
  • Your income
  • Details of any savings and investments

In line

You can apply in line if you have already used the service to apply for your retirement pension.

If you already have a pension credit and you need to inform the DWP of a change in your situation, you must do so by telephone.

By telephone

You can contact the Pension Credit Claim Line by calling 0800 99 1234.

You can call Monday through Friday from 8 a.m. to 6 p.m. If you cannot hear or speak on the phone, call Relay UK on 18001 then 0800 99 1234.

By mail

Print and complete a application for pension credit form or call the Claims Line to request a form. It can be sent to this address:

Pension service 8
Site B handling station
WV99 1YR

If you apply for pension credit and disagree with the decision you receive, you may have the right to appeal – this is also known as a “mandatory reconsideration”.

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