Pension Credit in 2022: a complete guide

What is Pension Credit? How much may I earn? Do my income and savings impact my eligibility? If you are elderly, you may be eligible for this benefit. This Your Benefits article will tell you everything you need to know about Pension Credits. 

How much is pension credit a week?

There is a maximum amount of Pension Credit you can get. If you are single, this is £177.10 in weekly income. If you are in a couple, this is £270.30 total in a weekly joint income.

You may be able to earn more, as shown in the table above. Extra money that you earn are what is called ‘Guarantee Credit’. Additionally, you may have a severe disability. Then, you may be eligible for extra Pension Credit amounts. In fact, you may get an additional £67.30 weekly if you get any of the following:

• Disability Living Allowance (DLA) (the middle or highest rate of the care component);
• Armed Forces Independence Payment;
• Personal Independence Payment (PIP);
• Attendance Allowance (AA).

What if I am single or in a couple?

You may care for another adult. In this case, you may be eligible to receive an additional £37.70 weekly. Either of the following must be true:

• You receive Carer’s Allowance;
• You do not receive Carer’s Allowance because you earn another benefit that pays more, but you have applied.

Extra pension credit for children

You may be eligible for an additional weekly £54.60 for every child or young person under your responsibility. If the child’s date of birth is earlier than 6 April 2017, this amount is £65.10 weekly instead. The child or young person must typically live with you. They must also be younger than 20 years old.

Your child may be 16 years or older and younger than 20 years old. You may earn the additional amount if they are in or accepted in:

• An approved training (like Foundation Apprenticeships);
• A non-advanced education course (an example of this may be studying for A levels or GCSEs. Additionally, they must be at their course for more than 12 hours).

You may earn Tax Credits. In this case, caring for a child may not earn you extra Pension Credit amounts. However, you might be able to receive Child Tax Credits.

The child or young person might also be disabled. In this case, you may be eligible for earning additional Pension Credit. The amounts are as follows:

• An additional £29.66 weekly (this is if they receive either Disability Living Allowance (DLA) or Personal Independence Payment (PIP));
• An additional £92.54 weekly;
  • If they are blind, or;
  • They receive the Disability Living Allowance’s (DLA) highest rate care component, or;
  • The Personal Independence Payment’s (PIP) enhanced daily living component.

Other ways to earn extra pension credit

You may earn extra Pension Credit through other means. For example, if you are the one paying for your housing costs. This amount would help you cover those costs. What you could be paid depends on the housing costs. You may qualify if you pay for:

• Certain service charges;
• Ground rent (this is if your property for which this applies is a leasehold);
• Costs for site rents and tents.

If you have a savings or second pension, you may be able to earn ‘Savings Credit‘. This is part of the Pension Credit. The following must apply:

• You reached State Pension age before 6 April 2016;
• You have a certain amount of money saved for retirement (this may be in the form of a workplace or personal pension, for example).

In this case, you will earn a maximum of £14.04 Savings Credit weekly, if single. You will earn a maximum of £15.71 weekly.

Apply for pension credit

You may start your claim for Pension Credit 4 months before reaching State Pension age. Moreover, your claim can only be backdated by 3 months if you wait to apply. In other words, if you wait 3 months before applying, you may still receive payments for it.

Before 15 May 2019, people could apply even if their partner was not State Pension age. That is not the case anymore.

Who is eligible for pension credit uk?

Some people may be able to earn more Pension Credit. This may be the case if you are responsible for a child, young person, if you are severely disabled or a carer.

You must currently live in England, Scotland or Wales in order to qualify for Pension Credit. Additionally, you must also have reached State Pension age.

The country you live in may not be in the UK. Your family or yourself may be from the following: EU, Norway, Switzerland, Iceland or Liechtenstein. The requirements you must then fulfil is to have a settled or pre-settled status under the EU Settlement Scheme. Only then can you earn Pension Credit.

The deadline was 30 June 2021 to apply to the scheme. However, you may still be eligible to apply.

Does being with a partner affect my pension credit eligibility?

If you are in a couple, it impacts how you apply for the benefit. Your partner and their information need to be included in the claim. In fact, both you and your partner will be eligible if either of the following applies:

• Both of you are State Pension age or older;
• Either you or your partner is earning Housing Benefit intended for people older than State Pension age.

Does my income impact my application?

Your income will be calculated when you apply for Pension Credit. On top of this, so will the income of your partner. The income you both earn will be combined in the calculation.

What does it mean that my Pension Credit “tops up” my income? Your Pension Credit, in this case, is added to your income. You may not earn more than the above amount. It is calculated by adding Pension Credit to your existing income.

You might have a higher income and still qualify for Pension Credit. There are special conditions that may mean you are still eligible, like a disability. Furthermore, you may care for someone or may have housing costs. You may even have savings. All these might make you still qualified.

What counts as income?

There are benefits, payments and earning that do and do not count as income. What is calculated in your income includes:

• State Pension;
• Pensions other than State Pension;
• Earnings from employment (this includes self-employment);
• Most of the social security benefits (this includes Carer’s Allowance).

There is a list of things that do not count towards income. Not all benefits are. This applies to the following:

• Attendance Allowance (AA);
• Personal Independence Payment (PIP);
• Christmas Bonus; 
• Child Benefit;
• Disability Living Allowance (DLA);
• Social fund payments (this includes things such as Winter Fuel Allowance);
• Council Tax Reduction;
• Housing Benefit.

What if I have deferred my pension?

You may have deferred a personal or workplace pension that you are entitled to. If this is the case, you may not have yet claimed it. This amount will still count as income regardless. In other word, it is the amount you’d be expected to have that counts towards income.

Because of everything described, you may not be able to earn ‘extra’ amounts of State Credit by deferring State Pension.

How much savings can you have before it affects pension credit?

You may have more than £10,000 in savings and investments. If so, every additional £500 counts as £1 weekly income. For example, you may have £14,000 saved up. That is 8 times £500 over £10,000. As such, your savings will count as an additional £8 weekly income.

What is pension credit?

If you are State Pension age or older and on a low income, Pension Credit is a benefit that may help cover day-to-day expenses. Additionally, costs resulting from housing may be covered by the benefit. This may include service charges or rent.

What benefits are pensioners entitled to?

If you earn Pension Credit amounts, you may also be entitled to other help. This includes:

• A free TV licence (this applies to people 75 years or older);
• Council Tax Reduction;
• Support for Mortgage Interest (this applies if you are the owner of the property that you live in); 
• Housing Benefit (this is if you are renting the property that you live in);
• Help with certain health costs (like NHS dental treatment, glasses, or costs towards transportation for hospital appointments);
• Additional help covering heating costs.