Can YOU claim pension credit? Here’s how to top up your weekly income to at least £203.85

If you are elderly and not well off, pension credit tops up weekly income to a minimum of £201.05 for single people and £306.85 for couples.

This guaranteed minimum income will rise 8.5 per cent in April, to £218.15 for single people and £332.95 a week for couples.

Pension credit also opens the door to a lot of additional help with household bills.

You can gain thousands of pounds on top including help with housing costs, heating, council tax, TV licences and other bills, and receiving pension credit also qualifies you for cost of living payments from the Treasury.

Pension credit: A vital way to top up your income if you are elderly and struggling to pay bills

Pension credit: A vital way to top up your income if you are elderly and struggling to pay bills

Pension credit is set at a few pounds less a week than the full state pension, which is currently £203.85 a week for people retiring since the flat rate system was introduced in April 2016.  

Couples where both partners qualify for the full state pension get double that amount, as everyone’s state pension is worked out individually.

This means people who have paid National Insurance all their lives are rewarded with a higher income, but pension credit still provides a basic safety net in place for the poorest older people.

Successive governments run by both main parties have committed to and maintained this system to ensure the elderly don’t live out their final years and die in extreme poverty, lacking money for necessities like food, shelter and warmth.

Yet despite their efforts to get everyone who is entitled to claim, many people still miss out on pension credit top-ups to their weekly income.

Government released figures last year on pension credit take-up which revealed that some 880,000 or six out of 10 families who were entitled did not claim it in 2021/22.

Up to £2.1billion went unclaimed, or around £2,200 a year for each family who were entitled to but did not claim pension credit.

The pandemic might have skewed the figures, and the Government has been running an awareness campaign urging hard-up elderly people to claim pension credit.

This tells them to disregard myths that might deter them from applying – including that having savings, a pension or owning a home are barriers.

The Government has also launched a trial directly targeting people who might qualify for pension credit, and encouraging them to sign up.

Older people living in households receiving housing benefit across 10 local authorities were sent ‘invitation to claim’ letters.

However, pension experts have called on the Government to do more to directly target people who are likely to be eligible and ask them to apply.

What are the advantages of claiming pension credit to top up your income?

A successful claim for pension credit means a boost to your income if you are entitled, and you also automatically qualify for a lot of extra payments and benefits worth thousands of pounds in total.

– Housing benefit towards your rent, mortgage and service charges, though the amount will vary based on housing costs in your area.

STEVE WEBB ANSWERS YOUR PENSION QUESTIONS

       

Our pensions columnist Steve Webb explains how housing benefit is assessed here.

– Help with council tax, depending on your personal circumstances and where you live.

– Carer’s allowance addition.

– Severe disability addition.

– Dental treatment and glasses vouchers.

– Free TV licence if you are over 75.

– Warm homes discount and cold weather payment.

How much are you allowed to have in savings?

The Government doesn’t want to penalise people for having built up some savings during their life.

A £10,000 rainy day fund is waived when you apply, though that sum was set in 2009 and is worth much less these days.

The figure is not a hard limit, just the threshold beyond which the amount of pension credit top-up you get starts to be affected.

Every £500 you have in savings over £10,000 is counted as £1 in income a week when your pension credit is calculated.

> Find out more about the savings rules for pension credit

What other rules do you need to know about?

– You need to have reached state pension age, currently 66, but you can start your application up to four months beforehand.

– Applications can be backdated for three months, provided you were eligible during that period.

– You are only eligible if you and your partner – spouse, civil partner, or someone you live with in a couple – have both reached state pension age. There is an exception if one of you is receiving housing benefit for someone over state pension age. The rules on mixed age couples were introduced in mid-2019 and apply to people who have signed up since then.

– You might be able to get a small extra top-up called ‘savings credit’ if you reached state pension age before 6 April 2016.

This is currently £15.94 a week, or £17.84 if you have a partner. In April this will rise by 6.7 per cent to £17.01 or £19.04.

– You can get a carer’s premium which increases your entitlement to pension credit.

If you are over state pension age, this is called a ‘carer addition’.

Steve Webb explains how the carer’s premium works here and Carers UK has more information here.

– If you defer a state pension or other type of pension, you will be assumed to be receiving that income.

– You can still receive pension credit if you leave the country for up to four weeks, or longer for exceptions like bereavement or medical treatment.

– Pension credit recipients are expected to tell the DWP if their circumstances change. Check this list of possible changes that affect pension credit, plus the contact details to use.

How to apply and where to get help with claims

Find out more about pension credit here and about the rules on who is eligible here.

You can apply yourself by phone on 0800 99 1234, claim pension credit online or get a form to do it by post.

A friend or family member can apply on behalf of an elderly person.

Age UK staff will also help with applications. If you call its free helpline they will check you are getting all benefits you are entitled to, including pension credit.

Any older person struggling with bills, or friends and family who are concerned about them, can call 0800 169 65 65.

This line is open every day of the year between 8am and 7pm, or you can visit Age UK’s help page here.

Age UK also has a free, anonymous benefits calculator which can provide an estimate of what you could be entitled to if you want to find out this information privately.

What if you are rejected for pension credit?

Claims for pension credit have soared but so have rejections, as elderly people try to boost their income to meet rising household bills.

Reasons for a pension credit claim being refused include having too much income, not being a UK resident, failure to provide all requested information, not claiming on time or not being the right age.

You can ask for the decision to be reviewed if you think it is wrong, under a process called ‘mandatory reconsideration’. This is free and doesn’t require a solicitor or other legal help.

How much is the state pension? 

The full flat rate state pension is £203.85 a week or an annual £10,600. This will rise to £221.20 or around £11,500 a year in April.

People who retired before April 2016 on a full basic state pension receive £156.20 a week or £8,120 a year. This is due to rise to £169.50 a week or around £8,800.

The old basic rate is topped up by additional state pension entitlements – S2P and Serps – if they were earned during working years.

People who have contracted out of S2P and Serps to pay less National Insurance over the years and retire after April 2016 might get less than the full new state pension. 

Workers now need to have 35 years of contributions to get the new flat rate state pension, compared with 30 years of qualifying National Insurance contributions to get the old state pension.

But even if you paid in full for a whole 35 years or more, if you contracted out for some years it might still reduce what you get. 

Everyone gets the option of deferring their state pension to get more in their later years and you can buy state pension top-ups to fill in gaps.

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