It’s sometimes called Guarantee Credit and it’s there to top up weekly income to £173.75 for a single person, and for couples £265.20 a week. So, if you're a single person and your total income from pensions is £150, you could be entitled to £23.75 Pension Credit.
It can be increased in certain situations, for example:
- if you have a severe disability;
- caring responsibilities or;
- housing costs, like service charges or a mortgage.
If you have more than £10,000 in savings, either as a single person or a couple, it will limit how much Pension Credit you can receive. Your savings over this amount will be converted to ‘tariff income’ at a rate of £1 for every £500, or part of £500, you have.
So, if you and your partner have combined savings of £13,150, you’ll be treated as having an extra £7 of tariff income each week. This is because you have six complete sets of £500 over £10,000, plus an extra £150.
If you’re eligible for Pension Credit, it could open doors to a number of other benefits too. You could also get full Council Tax Relief, Housing Benefit if you rent and the Warm Home Discount Scheme, worth £140 over the winter months.
Savings Credit is another type of Pension Credit you could apply for if you reached State Pension age before 6 April 2016. It’s means-tested and designed for people who have saved some money towards retirement, for example, with a small private pension. It pays up to £13.97 a week for a single person and £15.62 for a couple.
Unlike Pension Credit, receiving Savings Credit doesn’t guarantee you’ll also get Housing Benefit or a reduction in Council Tax.
George and Anne are in their 70s and both receive their State Pension. George also has a small pension from his old work. In total, this comes to £235 per week. Their combined savings are around £14,000, giving them a tariff income of £8 (8 x £1 for every £500 over £10,000).
£235 plus £8 brings their total income for the purposes of Pension Credit to £243. Their guaranteed income through Pension Credit, as a couple, is £265.20. This means they will be entitled to £22.20 per week.
Council Tax can be a significant cost, adding up to thousands of pounds every year. You might be eligible for Council Tax Reduction, or some financial support towards your Council Tax bill.
If you can get Pension Credit, then you can show your local council your Pension Credit award letter and you may not have to pay anything towards your Council Tax bill at all.
If you have savings under £16,000 and a low income, you may be eligible for support. If a couple, they’ll consider the income and savings of both you and your partner.
In Northern Ireland, Council Tax Reduction is known as ‘Rate Relief’. You can find more information about applying for Rate Relief on the nidirect website.
Your Council Tax bill can also be reduced in some other situations:
- 25% discount if you’re living alone, or if the other person you live with has been diagnosed with a Dementia or Alzheimer’s disease.
- If your home has features to make it suitable for a disabled person to live in, like space for wheelchair access or a room mainly used by the disabled person, your Council Tax band can be lowered to the next band down or one sixth off if you’re in Band A.
And you may not have to pay Council Tax at all if:
- Your home has been left unoccupied because of a hospital or care home stay.
- The only person living at the property has limited capacity. For example, if they have dementia, Alzheimer’s disease or a learning disability.
If you’re renting your home, Housing Benefit can help you to cover some or all of the cost of rent. To be eligible, you need to be responsible for rent payments and either be receiving Pension Credit or have savings (joint savings if you’re in a couple) under £16,000.
The maximum Housing Benefit you can receive if you’re renting from a private landlord is set by the Local Housing Allowance (LHA). You can find out the LHA for your area on the Government website.
If you rent from a ‘social landlord’, like your Council or a Housing Association, you may be able to have your full rent and any service charges covered by Housing Benefit, depending on your income or whether you receive Pension Credit.
Get in touch with your local authority to ask for an assessment for Housing Benefit.
Carers looking after someone for at least 35 hours a week can apply for Carers Allowance if they earn less than £128 a week after tax, NI and pension contributions.
To claim Carers Allowance, the person you care for must receive a disability benefit, such as:
- Attendance Allowance
- Disability Living Allowance (care component – middle or high rate)
- Personal Independent Payment (daily living component – standard or enhanced rate).
If you’re getting a benefit to replace income from employment, like the State Pension, then you can’t get paid Carers Allowance as well. This is because your income from these benefits is likely to be higher than the £67.25 a week you can get from Carers Allowance. But if you’re otherwise eligible, you could be granted an ‘underlying entitlement to Carers Allowance’ which can increase how much you get from other benefits like Pension Credit.
If you’ve reached the State Pension age, then you could claim a number of State Benefits if you’re eligible. Your State Pension age will depend on your date of birth.
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