Benefit payments confirmed by the DWP will rise 3.1% next year, in line with the Consumer Price Index (CPI). This means that pension credit rates will increase across the board.
Pension credit rate
Currently, Pension Credit tops up weekly income to £ 177.10 for single applicants or £ 270.30 for those with partners. Additional amounts may be granted to those with other responsibilities and costs such as looking after a child.
From April 2022, single applicants will receive £ 182.66, while coupled applicants will receive £ 278.70.
To be eligible for the pension credit, applicants must live in England, Scotland or Wales and have reached retirement age. If an applicant has a partner, this should be included in their application.
Applicants from a couple will be eligible if they and their partner have both reached the statutory retirement age and one of them receives housing allowance for persons above retirement age.
When a person applies for a pension credit, their income will be calculated. If they have a partner, their income will be calculated together.
The pension credit will supplement income when it is below the thresholds of £ 177.10 or £ 270.30. If an applicant’s income is more than these amounts, they can still get a pension credit if they have a disability, care for someone, have savings or have certain housing costs.
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Millions to miss
Unfortunately, many retirees will miss out on this increased income. Recently, the DWP released data which showed that around 1.47 million people were claiming a pension credit, but only about 60% of eligible recipients claimed this aid.
Helen Morrissey, senior pensions and pensions analyst at Hargreaves Lansdown, warned this could be particularly damaging as inflation continues to rise.
She said: “A lot of people don’t realize that they qualify for the pension credit and are at risk of missing out on a much needed boost to their pension income.”
“The pension credit also acts as a gateway to other benefits, with those over 75 getting a free TV license, for example. You can also get help with heating bills and municipal taxes, which can potentially be of huge help.
“Some people just don’t know there is a pension credit while others don’t realize they qualify. For example, you may still be eligible for the pension credit if you own your own home or have savings.
“With inflation really starting to show its teeth and energy bills on the rise, many retirees are facing a real drop in income over the next few months and any additional income is welcome. Anyone who thinks they can qualify for the pension credit should contact DWP. Even if you’ve been turned down in the past, a change in circumstances may mean you’re now eligible, so it’s worth checking out.
To help those who are unsure of their eligibility, the DWP offers a free pension credit calculator on their website. While using this tool, users will need details about their income, benefits, pensions, savings and investments.
It should be noted that this calculator cannot be used if the user, or his partner:
- postpone their state pension
- Own more than one property
- Are self-employed
- Have housing costs (such as service charges or rent from the Crown tenant) that are neither mortgage payments nor rent covered by housing allowance
The need for extra support can be particularly prevalent as winter approaches. According to a recent analysis by Age UK, it is estimated that 150,000 older households are at risk of being plunged into fuel poverty this winter due to soaring energy prices.
The charity has warned that more than 1.1 million elderly households will face hardship as spring approaches, of which around one million are already living in fuel poverty. With that in mind, Age UK has urged the government to take action and expand support on the winter theme where possible.
Caroline Abrahams, Charity Director at Age UK, commented: “There is no doubt that media reports of rising energy bills fill low-income retirees with dread. More than twenty-five thousand people have told us how worried they are, and it is clear that as it is, some expect to have to choose between reducing their food intake or turning down their heating, a. once the cold sets in. Doing either is a potential risk to their health, especially if they are living with serious health conditions like heart disease or COPD.
“At Age UK our biggest concern is that some older people will not even try to keep their homes warm enough this winter for fear of incurring big bills that they cannot afford to pay. Many older people are good at growing up on a small budget, but that’s unlikely to be enough to protect them from the impact of rising household bills and skyrocketing energy costs this time around. .
“New Age UK analysis suggests another 150,000 older households could be dragged into fuel poverty by spring, unless the government acts now to provide more financial support to those most at risk . We call for a package of measures to be put in place immediately, targeting the elderly who need the extra help the most. The package is expected to include a £ 50 grant to people eligible for the cold weather payment and a big boost to the Household Support Fund that councils are distributing to tackle fuel poverty in their areas. We also call for a new push to get more older people to claim their due pension credit. “