Pension credit eligibility explained

Pension credit is a tax-free financial benefit for pensioners who are on a low income. However, many people are unaware of pension credit and don’t realise they’re eligible to claim it.

According to the Department for Work and Pensions, in 2023, some 770,000 eligible people failed to claim pension credit, worth a total of £1.5bn.

On this page, you’ll find out more about pension credit entitlement, who can claim and how much it’s worth. We also explain how savings affect pension credit payments and what you need to do to make a claim.

Pension credit is an additional benefit you may be able to claim on top of your state pension if you have retired and are over pension age. It’s available for all pensioners who meet the pension credit criteria (more on that below), regardless of whether you’re single, widowed, or in a couple. More than three million households are eligible for pension credit, but only a third claim it.

Pension credit has two parts; guarantee credit and savings credit. In a nutshell, guarantee credit is for pensioners on a low income, while savings credit is a benefit you can claim if you’ve saved for your retirement.

Guarantee credit tops up your income to a level set by the government. If you’re single and your weekly income is below £218.15 (2024/25), your pension credit will top you up to this amount. If you’re a couple and your joint income is below £332.95 per week, you’ll get a top-up to bring your combined income to this amount.

Savings credit offers extra money if you’ve saved for your retirement. As of 2024/25, it enables single people to claim a credit of 60p for every £1 of income between £189.90 and £218.15 a week, and married people a credit of 60p for every £1 of income between £301.22 a week - £332.95 a week. A reduction of 40p for every £1 of income over £218.15 a week applies.

However, you can’t claim savings credit if you reached the state pension age on or after the 6th April 2016.

The amount you may be able to claim in pension credit will depend on the following:

• Your current income
• How much you’ve saved or invested
• If you’re a couple, the value of your combined income and savings

Based on those factors, you’ll top-up to one of the above amounts under guarantee credit or savings credit. Even if you find it’s only a small amount, you may still want to claim it because it might help you qualify for other benefits as well as providing a little additional income. The extra benefits you may be entitled to by claiming pension credit include:

• Free TV licence (for over 75s)
• Council tax reduction
• Warm home discount
• Housing benefit
• Cold weather payments
• Free home insulation and boiler grants
• Free dental treatments
• Vouchers for glasses/contact lenses

Pension credit rates are set by the government every year, although as we’ve already explained, the amount you’ll receive depends on your weekly income and how much you have saved or invested. The 2024/25 pension credit rates are as follows:

Guarantee credit:

• £218.15 if you’re single
• £332.95 if you’re a couple

Savings credit - a maximum of:

• £17.01 extra per week if you’re single
• £19.04 extra per week if you’re a couple

There are also circumstances in which you may be able to claim additional support. If you have a severe disability, for example, you could get an extra £81.50 a week. Carers are also entitled to additional support, worth up to £45.60 a week in 2024/25.

You can calculate how much pension credit you could receive by using the government’s online calculator.

To be eligible for pension credit, you must be living in the UK and have reached the state pension age (currently 66 for both men and women). As a couple, you may only claim your pension credit if both partners have reached the state pension age. Even if you own a home, you may still be eligible.

When claiming guarantee credit, if you’re at an eligible age but your weekly income is higher than the threshold mentioned above, you may still be eligible to claim if you meet any of the following criteria:

• You have a severe disability
• You are currently a carer
• You still have to pay housing costs, such as a mortgage

Only people who reached the state pension age before the 6th April 2016 are eligible for savings credit. However, if you’re a couple and one of you reached the state pension age before the 6th April 2016, you may still be able to claim. It’s important to note that if you have savings over £10,000, it might affect the amount you will receive in pension credit.

It’s important to note that if you have savings over £10,000, it might affect the amount you will receive in pension credit (see below).

Since pension credit is means-tested, the amount of money you have determines how much credit you’ll receive. If you reached state pension age before the 6th April 2016, you can claim the savings credit part of the pension credit.

There’s no limit on how much money you can have in your savings to claim savings credit, but if you have savings over £10,000, it might affect the amount you’ll receive. Essentially, the government treats every £500 over the £10,000 pension credit savings limit as £1 income a week. So £12,000 in savings, for example, counts as £4 of income per week.

As with savings credit, having more than £10,000 in savings may mean that you won’t receive the maximum amount of guarantee credit.

The easiest way to claim pension credit is through the gov.uk website.

Alternatively, you can call the Pension Service. They can fill a pension credit application on your behalf. You’ll need to prepare some information to make the process quicker, and it helps to have the following to hand:

• Your National Insurance number
• Bank account details
• Information that indicates your income, savings or any investments
• Pension information, if you have one
• Housing costs, such as mortgages, interest payments and service charges
• If you’re a couple, you’ll both need to provide your details

If you’re unable to claim by phone, paper applications are also accepted. If you choose to do this, the earliest you can start your application is four months before you reach state pension age. While you can claim any time after you reach that age, your claim may only be backdated up to three months, meaning you could miss out on benefits.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.