WHAT IS PENSION CREDIT, AND HOW DO YOU CLAIM IT?
Pension credit has been thrust into the spot because claiming it is now the only way to qualify for the Winter Fuel Payment.
Under Chancellor Rachel Reeves’ controversial plan, only households with someone over state pension age (66 and older) and in receipt of pension credit will now be eligible for the Winter Fuel Payment.
In the 2023-24 tax year, Winter Fuel Payments could be claimed by those born before 25 September 1957, worth between £250 and £600 to help you pay your heating bills. This included an extra “cost of living payment”.
But as a result of a new means test, 10 million retirees will lose out on hundreds of pounds a year, with only a fraction still able to claim the payments.
So, making sure you claim pension credit has become more important than ever. Not doing so could cost you an extra £300 this winter.
What is pension credit?
Pension credit is a means-tested benefit for those above state pension age with a low income. It tops up your income to help with everyday living costs, providing an average income boost of around £3,900 per year.
However government figures published last year showed approximately 850,000 pensioners who are eligible for pension credit were not claiming it – roughly one in three.
In a bid to increase take-up the Department of Work and Pensions has launched a campaign to raise awareness of the benefit and who can claim it.
Who is eligible to claim?
To qualify for pension credit, you must:
- Be above state pension age, which is currently 66. For those who are not British, you will need to have settled or pre-settled status under the EU Settlement Scheme.
- Have a weekly income of up to £218, if you are single, or up to £332 a week if you are in a couple and both above state pension age.
- Have savings of less than £10,000. You can still claim pension credit if you have more than £10,000, but you will receive a lower amount.
However, you may still qualify if you have a higher income. Those with disabilities or who are carers may still qualify for pension credit even if you have a higher income. To see whether you qualify, you can use the Government’s pension credit calculator.
You’ll need details of your earnings, benefits and pensions, as well as your savings and investments.
How much can you get?
Pension credit is made up of two elements; guarantee credit and savings credit. You can be eligible for one or both parts of the benefit.
Guarantee credit is additional income on top of the state pension you receive to a guaranteed minimum level. If you are single, guarantee credit will top up your weekly income to £218.15. If you are part of a couple the additional payment will take your joint weekly income to £332.95.
Savings credit operates slightly differently. This is extra money available if you reached state pension age before 6 April 2016, and saved some money for retirement – such as in a savings account or private pension.
The maximum you receive as a single person claiming savings credit is £17.01 a week, and the maximum for a couple is £19.04.
There is also money available if you care for someone. A so-called carer addition can be worth up to £45.60 a week.
For those with a disability you could be eligible for a severe disability addition, which is worth up to £81.50 a week.
How do I make a claim?
Anyone who thinks they may be eligible to claim pension credit can apply online via the government website.
- The earliest you can apply is four months before you’re due to start receiving state pension payments. You can apply any time after receiving state pension payments, but note that pension credit payments can only be backdated for up to three months, so you miss out on payments you would have been eligible for at an earlier date.
- Like the state pension you are not automatically enrolled into pension credit, so you must make a claim in order to receive the retirement benefits.
You can also call the pension credit claim line on 0800 99 1234 and the team will fill out an application for you over the phone. A friend or family member can call for you if you are unable to use a phone. Or you can apply by post. You need to print out and fill in a Pension Credit claim form that can be found online or you can call to request one.
This can then be sent by freepost, so doesn’t require a stamp, to: Freepost, DWP Pensions Service 3.
- In order to apply you will need your National Insurance number and information on your income, savings and investments.
What other benefits can you get when you claim pension credit?
Receiving pension credit doesn’t just provide you with additional money to top up your finances, it’s a gateway that gives you access to a range of other grants and savings.
Winter Fuel Payment
Recipients of pension credit will still be eligible for the Winter Fuel Payment, while those who only receive the state pension will no longer get this financial help with energy costs. Eligible pensioners will receive up to £300. However, as the payment is only once a year you will need to submit your pension credit application far enough ahead to ensure you receive the benefit.
The last day to make a claim for back dated pension credit and the associated benefits is 21 December and the qualifying week in 2024 for Winter Fuel Payments will be from 16 to 22 September.
Free TV licence for over-75s
Receiving pension credit may also mean you don’t have to pay a TV licence fee, saving £169.50 this year. If you or someone in your household is over 74 and receives pension credit then you can apply for a free TV licence.
Some broadband providers also offer discounts on internet services for those receiving pension credit, but this will vary.
Free insulation and boiler grants
Both private tenants and homeowners who receive pension credit could be eligible for a grant to help replace a broken or ineffective boiler.
Energy companies operating under the Energy Company Obligation scheme are required to provide funding for eligible households for energy efficiency improvements in a bid to reduce fuel poverty.
Reduced medical expenses
Pensioners who receive pension credit may also be eligible for free dental care, contributions to the cost of new glasses and help with transport to hospital. And if you or your partner receive pension credit you may also be entitled to free NHS prescriptions.
Reduced council tax
If you are a pensioner receiving guarantee credit you may get your council tax reduced or even paid in full. If you only receive savings credit you may still be able to receive a discount if you have less than £16,000 in savings.
Housing benefit
If you have reached state pension age and are struggling with your housing costs – mortgage payments or rent – you may be able to receive housing benefits to help make up the shortfall.
2024-07-29T17:46:25Z dg43tfdfdgfd