Pension Credit is a “historically underclaimed” benefit that 700,000 pensioners could be missing out on, experts say
Payments can be worth £4,200 a year(Image: Getty Images)
Hundreds of thousands of pensioners may be missing out on £4,200 a year from a “historically underclaimed” benefit, according to experts. As many as 700,000 people don’t even realise they are entitled to the benefit.
Pension Credit, issued by the Department for Work and Pensions (DWP), is paid to people over the State Pension age who are on a low income and need extra money to help with living costs.
The means tested benefit can also help with housing costs, such as ground rent or service charges. Recipients might also get extra help if they’re a carer, severely disabled, or responsible for a child or young person.
Hundreds of thousands of pensioners are eligible to claim Pension Credit, but it’s estimated that a staggering 700,000 people are missing out, the Express reports.
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Rachel Vahey, head of public policy at AJ Bell, said: “Pension Credit has historically been underclaimed, with many people not realising they may be entitled to the payments. Pension Credit won’t be paid automatically, so you have to submit a claim through the DWP.”
She added: “If you’re unsure whether to claim because you’re close to the income threshold, there’s no harm in submitting a claim – the worst that can happen is you find you’re not eligible.”
Who is eligible to claim Pension Credit?
The Pension Credit benefit aims to top up people’s State Pension to give them a more reasonable standard of living. Claiming can also unlock access to other means of support, such as council tax reductions and free TV licences.
Pension Credit is separate from your State Pension, and you can get Pension Credit even if you have other income, savings or own your own home.
To claim, a person must live in England, Scotland or Wales and have reached the State Pension age (currently 66 and over). They or their partner must also be receiving housing benefits.
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If this applies, the person must then work out their total weekly income. This should include the State Pension, other pensions, earnings from employment and self-employment, and most social security benefits, such as Carer’s Allowance.
Not all benefits are counted as income. For example, the following are not counted and shouldn’t be included in the calculation:
- Adult Disability Payment
- Attendance Allowance
- Christmas Bonus
- Child Benefit
- Disability Living Allowance (DLA)
- Personal Independence Payment (PIP)
- Social fund payments, such as the Winter Fuel Allowance
- Housing Benefit
- Council Tax Reduction
In April, rates of the benefit went up in line with the rate of inflation from the previous September – which was confirmed as being 1.7%, according to the consumer price index.
Rates of Pension Credit
Standard minimum guarantee
- Single: The maximum amount a single person may be able to claim is £227.10 a week
- Couple: The maximum amount a couple is able to claim is £346.60 a week
Extra amounts
Top up and extra amounts given for other responsibilities and costs, known as ‘Guarantee Credit’, include:
- If you have a severe disability, you could get an extra £81.50 a week
- If you care for another adult you could get an extra £45.60 a week
- If you’re responsible for children or young people you could get an extra £66.29 a week for each child or young person you’re responsible for. This is increased to £76.79 a week for the first child if they were born before 6 April 2017.
- If the child or young person is disabled you could also get an extra amount of either: £35.93 a week if they get DLA, PIP or ADP, or £112.21 a week if they’re blind or they get the highest rate care component of DLA or CDP, or the enhanced daily living component of PIP or ADP
- If you have savings or a second pension you could get the ‘Savings Credit’ part of Pension Credit. To be eligible you must have reached State Pension age before 6 April 2016 and have saved some money for retirement, for example in a personal or workplace pension. You’ll get up to £17.01 Savings Credit a week if you’re single and, if you have a partner, you’ll get up to £19.04 a week.
If you live alone and have a weekly income of less than £227.10 (just over £11,800 a year), then you’ll likely be eligible for Pension Credit. The same applies to a couple with an income of £346.60 per week, equivalent to just over £18,000 a year.
However, if your income is higher, you might still be eligible, so it’s worth using the Government’s calculator to find out.
It takes an average of 16 minutes to check, according to Pensions Minister Emma Reynolds.
Ms Reynolds previously said: “We know 90% of new customers apply using our simple online form or over the phone. So I would urge everyone to check for their own eligibility or assist family members to apply online or pick up the phone today.
“The online process takes on average 16 minutes, so I would encourage people to apply for Pension Credit, worth around £4,200 a year.”
To apply for the benefit, people can reach the helpline by telephone on 0800 99 1234 or by textphone on 0800 169 0133. They can also apply online on the gov.uk website.