Pension Credit
Pension Credit is a means-tested benefit provided by the government to people over the age of 60 whose income, including basic and second state pension does not exceed a certain minimum. The aim of Pension Credit is to lift the poorest pensioners out of poverty. If and how much Pension Credit you may be entitled to depends on your household income and other savings. In other words, the amount of Pension Credit you may get depends on how much income you have per week from the following sources:
- Basic State Pension (BSP) and State Second Pension (S2P)
- Occupational (company) and private pensions
- Social security benefits, such as Carer’s Allowance
- Earnings after tax from employment or self-employment, less half of your personal or company pension contribution
- Every £500 of your savings and investments over £10.000 is calculated as an income of £1 a week. This includes your property, excluding your main home
- The income of your spouse, civil partner or even the person you live together as if you were a marriage is added to your income in order to calculate your Pension Credit.
Some Income is not taken into consideration when calculating your Pension Credit, including Attendance Allowance, Christmas Bonuses, Disability Living Allowance, Housing Benefit and Council Tax Benefit. You can still receive Pension Credit if you own your own home where you live.
There are two different types of Pension Credit, namely:
- Guarantee Credit, which is an income base benefit to top up your weekly income to £132.60 if you are single or to £202.40 if you are married. There are higher rates for people who are disabled, care for others or have certain housing costs, such us mortgage or interest repayments. You can apply for Guarantee Credit if you live in the UK and have reached your State Pension Age.
- Savings Credit, which is a benefit to reward people who made extra savings for their pension. You can claim Savings Credit if you are 65 or over and you have made some provisions such as savings or second pension to secure your income after retirement. You are entitled to Savings Credit if your weekly income is up to about £184 for single people or up to about £270 for married ones. The current rates of Savings Credit are £20.52 a week if you are single and £27.09 a week if you are married or in a civil partnership. There are higher rates for people who are disabled, care for others or have certain housing costs, such us mortgage or interest repayments.
Pension Credit is increased by the government in line with wage inflation each year. Pension Credit is usually paid directly into your bank account. If you receive Pension Credit you are still entitled to get additional benefits, such as Housing Benefit.
To establish how much Pension Credit you may get, please use the Pension Credit Calculator. To apply for Pension Credit you can directly call The Pension Service or contact Capital Business Links Ltd on telephone 0208 567 99 44 or at our e-mail address. Our adviser will help you apply for Pension Credit and inform what to do next.