Pension credit is a means tested state pension top-up targeted at those above the retirement age who have a low income. It’s always been a highly valuable benefit for the poorest pensioners.
Following Monday’s shock announcement by chancellor Rachel Reeves that only people claiming pension credit will get the winter fuel payment in future, it’s more important than ever.
On average, pension credit boosts people’s income by £61 a week, or £3,172 a year. It can make a huge difference to struggling pensioners, and never more so than now.
The winter fuel payment is worth up to £300 a year for single people and £600 for couples. But thanks to Reeves, only those who get pension credit will be eligible. Claiming is therefore vital.
Pension credit tops up a single person’s income to £218.15 a week, equivalent to £11,343.80 a year. This rises to a joint income of £332.95 a week for couples, or £17,313.40 a year.
Anybody whose income is above this cut-off point won’t qualify for pension credit, and now they won’t get their winter fuel payment either.
Unfortunately, many on incomes below these levels won’t get pension credit either, because only six in 10 who are eligible actually claim.
While 1.4million get pension credit, an estimated 880,000 are missing out for no good reason. Now they’ll lose their winter fuel payment, too.
Reeves pledged on Monday that she would attempt to boost pension credit uptake, but politicians have been trying for years, with little success.
Don’t leave it to the politicians. Everyone should take this opportunity check whether they or a family member, friend or neighbour are eligible, and make sure they get it.
Despite frequent campaigns by the media and government, many still miss out, said Jon Greer, head of retirement policy at Quilter. “This is often due to lack of awareness or a feeling that they won’t be eligible.”
People may still qualify even if they have savings or own their home, Greer said. “As well as guaranteeing a minimum weekly income, pension credit opens the door to a variety of other support.”
This includes help with council tax, housing costs such as ground rent or service charges, and heating bills. Plus there’s extra help if you’re a carer, severely disabled, or responsible for a child or young person.
Pension credit also acts as a gateway to free TV licences for the over-75s and even dental treatment. With Labour ready to slash universal pensioner benefits, this could be the only way to hold onto them.
You can apply by filling out an online form available at Gov.uk, printing and completing a paper form, or by calling the Pension credit claim line on 0800 99 1234.
Those unsure about their eligibility can check using the online pension credit calculator at Gov.uk/pension-credit-calculator.
First, gather details of your earnings, benefits and pensions, and any savings and investments you have. If you live with a partner, you’ll need their details, too.
For pension credit purposes, your income includes your state pension and other pensions, earnings from employment or self-employment, and most social security benefits, said Tom Selby, director of public policy at AJ Bell. “It’s up to you to claim pension credit, you will not get it automatically.”
If you struggle to get your head round the online calculator, or don’t have internet access, call the Pension Credit claim line.
The calculator won’t work for those who are deferring their state pension, own more than one property, the self-employed or someone who gets housing benefit for people above state pension age if their partner is under state pension age. They should call the Pension Service helpline on 0800 731 0469.
Morgan Vine, head of policy and influencing at Independent Age, said many will now lose the winter fuel payment because their income is only just above the pension credit cut-off point.
“Every day we hear from older people who just miss out on pension credit but still struggle to pay their energy bills. They could now be heading into winter without this important lifeline.”
Don’t assume your or a loved one can’t get pension credit. That’s an even costlier mistake than it was before.
Labour has declared a war on wealth and pensioners are on the front line – see how to protect yourself.
