Pension Credit

Pension Credit is a means-tested benefit which depends on your income and savings. It is designed to provide those over qualifying age (see below) with a minimum level of income and give extra cash to pensioners with modest incomes who have made savings for their retirement.

Pension Credit has two elements:

• the Guarantee Credit tops up your weekly income if it’s below £148.35 (single people) or £226.50 (couples) for those who have reached the minimum qualifying age (see below), and whose income is below a certain level known as the “applicable amount” (see page 78); and

• the Savings Credit is for those aged 65 or over who have some savings or pension that brings their income over that level.

The qualifying age for Pension Credit is gradually going up to 66 in line with the increase in the State Pension age for women to 65 and the further increase to 66 for men and women.

Entitlement to each part is calculated separately, so you could get either or both. You can apply for Pension Credit regardless of the amount of savings that you have. Any savings below £10,000 will be disregarded, while savings above this level will be deemed to provide an income of £1 a week for each £500 or part thereof.

These amounts may be more if you are disabled, have caring responsibilities, or certain housing costs, such as mortgage interest payments.

If you are aged 65 or over you may be entitled to Savings Credit if your income is more than the Savings Credit threshold. You may get the Savings Credit on its own or with the Guarantee Credit. You may be entitled to Savings Credit if you:

• are aged 65 or over; and

• have made some provision towards your retirement such as savings or a second pension.

In 2014, the single person’s Savings Credit threshold rises from £115.30 to £120.35, while the couple’s threshold rises from £183.90 to £192.00.

In addition to reducing the number of eligible claimants by making the threshold higher, the government has reduced the maximum amount payable through Savings Credit — from £18.06 to £16.80 per week for a single person, and from £22.89 to £20.70 per week for a couple.

Further information on the Guarantee Credit and Savings Credit is available at: www.gov.uk/pension-credit

Pensioners who work and Universal Credit

As Universal Credit replaces Housing Benefit (HB) and Child Tax Credit, and is only for working-age people, pensioners who have costs of rent and dependent children need to be supported in a different way.

Because of this, there will be some changes to Pension Credit so that it includes support for rent and an additional amount for those pensioners with dependent children.