What’s Pension Credit?

Pension Credit: What You Need to Know

If you’re looking for a reliable pension to provide you with an income when you retire, then the Pension Credit is what you need. The government has put in place this new scheme to help people who are on low incomes or don’t have any savings to fall back on. Here’s all that we know about it so far.
What’s Pension Credit

What’s Pension Credit – And Do I qualify?

The Pension Credit1 is a new government initiative that provides people with an income when they retire. It’s designed for those who have a low or no level of savings, and it can help cover living costs like housing and heating bills and provide some money to live on each week.

You qualify if you’re not in paid work anymore, but your weekly disposable income doesn’t exceed £77 (in England) or £81 (outside of England). That includes any benefits you get from the state – so even if you don’t earn anything at all, this will still be available. If it sounds like something you’re interested in but aren’t sure if you qualify, check out the eligibility criteria below:

  • You need be aged 65 or above; OR
  • You must not have reached state pension age yet (currently 60 for women and 65 for men); AND
  • Your savings are below the Savings Credit Threshold; OR
  • Have an income of £110 per week (or less) from savings or other sources.

If you’re in a couple, one partner must meet the criteria above, and the other should be living in England or Northern Ireland.

Rule Change For Couples As Of 15 May 2019

Rule Change For Couples As Of 15 May 2019

As the UK Government has introduced a new policy change on how couples will be treated for Pension Credit, we’ve made some changes to deal with it.

Think about this for a moment:

If you’re a couple and one partner is eligible for Pensions Credit but not their spouse/civil partnership, then they’ll still get £40 per week (just like before).


If both partners are eligible for Pensions Credit, then whichever partner had the lowest amount of savings as of last 30 April 2019 will receive £20 per week instead of £30 so that they can keep more money towards pensions – meaning that if your partner receives less than £110 from other sources each week, he or she may now qualify.

What are the benefits of Pension Credit?

A person who gets Pension Credit will get a:

  • The weekly amount of £139.80 (£208.00 less the housing costs) for single people; OR
  • The weekly amount of £244.60 (£163 plus any weekly savings credit) for couples where one partner is aged 65 or over and on pension credit income-related benefit; OR
  • A higher weekly income rate if you have a disability (Pension Credit Disability Living Allowance). This means that there are three different rates, not just two, as with other benefits because every individual’s circumstances might be slightly different from someone else in this group

Here’s an interesting fact:

The minimum level to qualify is an assessed need at least equal to 74%. The assessment considers your age, current health condition, income, savings, and other assets.

How Do I Apply For Pension Credit

How Do I Apply For Pension Credit?

To apply for Pension Credit, you need to complete the application form and send it back with all of the necessary documents. The Department will then assess your claim and decide whether or not you are entitled to a payment.

The main conditions that they will consider:

  • Your age;
  • If you’re living in rented accommodation (or have lived there for at least twelve months);
  • Whether any partner is aged 65 or over and on pension credit income-related benefit;
  • Any other benefits that may be available from which other people could take priority (such as disability allowance);
  • Income received by anyone who lives with you, including earnings from work or investments such as shares;
  • Savings, investments and any other property or possessions you might have;
  • Your national insurance record

You see:

The list is not exhaustive, but it shows the broad range of factors that affect eligibility for Pension Credit. If you fall below a certain level of income, this will be calculated and taken into account to ensure that you are eligible to receive pension credit payments.

Additional Pension Credit in Special Circumstances

Pension credit may also increase when someone has reached state pension age2, and their weekly income reduces due to their partner’s death, separation or divorce; when caring responsibilities are transferred between parents after family breaks up; by providing care for one person severe disability; or when a person is in hospital.

Imagine this:

For each week of care, the pension credit can go up by £23.80 to £138 per week, and for someone who has caring responsibilities for one person with substantial needs, their weekly income may be increased by an additional £41.90 (£135 plus £75) per week.

Savings credit

Savings credit

You can also get credit for the savings that you have if any. The amount of cash support will be reduced by £13 per week (£16 per week from April 2020) due to these payments.

Suppose your earnings are less than the weekly income threshold (currently £166). In that case, you may receive up to an additional £138 in pension credit each week, and this is dependent on meeting certain criteria set out below.

From January 2017, if a person’s earned income falls under their housing costs or service charges, they will not need to meet minimum level conditions to qualify for Pension Credit unless there is another reason why they do not qualify, e.g., because of caring responsibilities or low income-related benefits is low, and you have a high housing cost.

Got Questions? Check These First

Could Pension Credit help me get other benefits?

How much is Pension Credit a week?

Can I get Pension Credit if I have savings?

Can I get Pension Credit if I own my house?

In conclusion

So take the next step:

Pensions are no longer just for the rich. The Pension Credit is a new state pension initiative that will provide extra help to those who need it most. If you think this might apply to you, be sure to determine if and how much income tax credits or benefits can offset your contributions before moving forward with any plan changes. You don’t want to miss out on potential savings.


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