If you\u2019re on a low income after retirement, there are benefits available that can help you maintain a comfortable standard of living. One of the main ones is pension credit. You may qualify for this benefit automatically if your income is below a certain level once you\u2019ve reached state pension age. Around 1.5 million pensioners throughout the UK receive pension credit \u2013 but around 2 in 5 eligible pensioners don\u2019t claim what they\u2019re entitled to. Even if you reached state pension age a few years ago, it\u2019s not too late to start claiming. We explain what pension credit is, how much you could get and how to apply.<\/p>
Pension credit is a means-tested weekly benefit for people who are over state pension age<\/a> and on low incomes. Eligibility is based on how much money you have coming in. If you are eligible, it can offer a much-needed top-up to your weekly pension income. But importantly, you don\u2019t receive it automatically. If you want to receive it, you must put in an application.<\/p> Pension credit is split into two parts: guarantee credit and savings credit. Some people receive both, but others only qualify for one of the two. In both cases, you\u2019ll only qualify if your income isn\u2019t too high.<\/p> This is the main type of pension credit. It tops up your weekly income to a guaranteed minimum amount.<\/p> This is usually only available to people who reached state pension age before 6 April 2016. It rewards those who have been proactive about saving for retirement, and have a modest income via a savings account or pension, by paying an additional benefit.<\/p> According to government statistics, the average pension credit payment is more than \u00a359 a week \u2013 that\u2019s more than \u00a33,000 a year. How much each person will receive depends on their specific level of income and whether they qualify for one or both types of pension credit.<\/p> Let\u2019s start with guarantee credit. As of the 2024\/25 tax year, this tops up your weekly income to:<\/p> If you earn less than these amounts, you\u2019ll receive enough benefit to lift your income to these levels.<\/p> Example:<\/strong> If you\u2019re single and your weekly income from other sources is \u00a3125, you\u2019ll be eligible for a guarantee credit top-up of \u00a393.15.<\/p> If you reached state pension age before 6 April 2016 and have saved some money for retirement, you may also qualify for the savings credit part of pension credit. If you qualify, this entitles you to a maximum weekly payment of:<\/p> The eligibility criteria to receive savings credit are a bit complicated, as we\u2019ll explain below.<\/p> The criteria for entitlement to guarantee credit are fairly straightforward. You must:<\/p> The criteria to qualify for savings credit are a little more complicated.<\/p> Admittedly the first part is straightforward. It\u2019s only available to people who reached state pension age before 6 April 2016. This can include couples where one member of the couple reached state pension age before this date. And, as with guarantee credit, you must living in the UK.<\/p> In addition to these basic criteria, you must have made some provisions for your retirement, such as a pension (other than the state pension) or savings.<\/p> A bit counterintuitively, given these are benefits aimed at those on low incomes, there are also minimum thresholds on how much income you must earn to qualify for savings credit. As of the 2024\/25 tax year, these minimum thresholds are \u00a3189.80 a week for single people and \u00a3301.22 for couples.<\/p> Exactly how much of the maximum benefit (\u00a317.01 a week for single people and \u00a319.04 for couples) you might qualify for depends on how much you earn above these minimum thresholds. The maths can be a bit complicated so, if you\u2019re not already receiving pensions credit but think you might be entitled to savings credit, your best bet is simply to try applying and find out how much you might be owed. Remember that you\u2019ll only be eligible if you (or in some cases your partner) reached state pension age before 6 April 2016.<\/p> If you want to get a sense of how much pension credit you might qualify for before you apply, you can use the government\u2019s pension credit calculator<\/a> to check if you\u2019re eligible and an estimate of how much you might get.<\/p> It just takes 2 steps:<\/p> Payments of pension credit usually go directly into your bank or building society account. Payments can be made weekly, fortnightly or four-weekly.<\/p> If you are unable to act for yourself, the payments can instead be made to someone you have given power of attorney or another official appointee.<\/p> Yes, there are a few circumstances in which you might qualify for some additional allowances on top of guarantee credit. These amounts are all correct as of the 2024\/25 tax year:<\/p> Typically, no. As of 15 May 2019, couples can only claim pension credit when both partners have reached state pension age. There may be an exception if one member of the couple is receiving housing benefit for people over state pension age.<\/p> If you don\u2019t meet the pension credit eligibility criteria as a couple, you may be able to claim universal credit instead. However, this is likely to be worth less.<\/p> If you are a couple where one partner is below state pension age, but were already receiving pension credit before May 2019, this will be unaffected as long as other circumstances don\u2019t change.<\/p> It depends on the level of savings. If you have \u00a310,000 or less in savings and investments, your pension credit will be unaffected.<\/p> If you have more than \u00a310,000, every \u00a3500 over \u00a310,000 will be treated as the equivalent of \u00a31 income a week. For example, if you have \u00a312,000 in savings, this will count as \u00a34 income a week.<\/p>How does pension credit work?<\/h3>
What is guarantee credit?<\/h4>
What is savings credit?<\/h4>
How much is pension credit worth?<\/h3>
Guarantee credit<\/h4>
Savings credit<\/h4>
Who is entitled to pension credit?<\/h3>
Guarantee credit<\/h4>
Savings credit<\/h4>
How do I know exactly what pension credit I qualify for?<\/h3>
How do I apply for pension credit?<\/h3>
How is pension credit paid?<\/h3>
Can I ever get more than the basic amount of pension credit?<\/h3>
I\u2019m state pension age, but my partner isn\u2019t. Can we claim pension credit?<\/h3>
Does the money I have in savings affect my eligibility for pension credit?<\/h3>