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. The qualifying age for Pension Credit is gradually going up in line with the increase in women’s State Pension Age (see page 74).


Pension Credit currently has two elements:


• the Guarantee Credit tops up your weekly income if it’s below £155.60 (single person) or £237.55 (couples) for those who have reached the minimum qualifying age; and


• the Savings Credit is an extra payment for those who have some savings or pension that brings their income to the required level (see page 75). To qualify you or your partner must be 65 or over but most people who reach State Pension Age on or after 6 April 2016 won’t be eligible for Savings Credit.


Entitlement to Pension Credit


Entitlement to each part of Pension Credit 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 per 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 (and reached State Pension Age before 6 April 2016) 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 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.


Savings credit may be paid if you or your partner are 65 or over and have qualifying income above your Savings Credit threshold. 


In 2016, the single person’s Savings Credit threshold rises from £126.50 to £133.82 a week, while the couple’s threshold rises from £201.50 to £212.97 a week.


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 £14.82 to £13.07per week for a single person, and from £17.43 to £14.75 per week for a couple.


Changes to Pension Credit


As part of the Pensions Act 2014, the Savings Credit part of Pension Credit closed for people reaching State Pension Age on or after 6 April 2016. 


However, you may still get Savings Credit if you are part of a couple and one of you reached State Pension age before 6 April 2016.