Hundreds of thousands of Britons missing out on Pension Credit boost

Pension Credit: Yvonne on living on the breadline

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Pension Credit is a benefit distributed by the Department of Work and Pensions (DWP) to help those retired and on lower incomes with living costs. Pension Credit is separate from the state pension and people can receive this even if they have other income, savings, or own their own home. However, it has the lowest take-up of all income-related benefits, according to charity Independent Age.

There are two types of Pension Credit available; guarantee credit and savings credit, which by applying, can provide people with access to additional benefits like Housing Benefit and Council Tax discounts.

Currently, “guarantee credit” works to top up weekly income to a guaranteed level of £182.60 if a person is single, or for those with partners, a joint weekly income level of £278.70.

However, in line with Chancellor Jeremy Hunt’s Autumn Budget, this rate will increase – along with the state pension next year – by 10.1 percent.

The move is said to provide an additional £1,470 a year for a couple and £960 for a single pensioner.

Savings credit provides additional funds to those who have made some provision towards their retirement by saving or contributing to a pension other than the basic state pension, and affords people a top-up of £14.48 a week if they’re single, or £16.20 a week for those with partners.

This could make for a much-needed income boost to many in need but, it must be noted, Pension Credit is not automatic. It does need to be claimed, which answers for the significant lack of uptake.

In fact, as many as 850,000 eligible households could be missing out on these benefits, according to consumer choice platform Which? 

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Research commissioned by Independent Age in 2020 estimated that if every eligible pensioner received the Pension Credit they were entitled to, it would lift roughly 400,000 of those out of poverty at the time the research was conducted.

And while living costs continue to spiral, it’s now more important than ever for Britons to check they’re receiving all of the support they’re entitled to.

Who is eligible for Pension Credit?

Pension Credit rules can be complex so to start with, a person must live in England, Scotland or Wales and have reached the state pension age (66 and over).

They or their partner must also be in receipt of housing benefit.

If this applies, the person must then work out their total weekly income. This is calculated to include the person’s state pension, other pensions, earnings from employment and self-employment, and most social security benefits, for example, Carer’s Allowance.

People are most likely to be eligible for Pension Credit if their total weekly income is roughly under £200. However, if their income is higher, they might still be eligible.

If a person has a disability, cares for someone, has savings, or they have housing costs, additional support can be available.

So, even if a person only passes the first stage of eligibility, people can check the website or call the Pension Credit helpline to see if they qualify for something else. 

People can view the full list of additional benefits, what they can receive, and whether or not they qualify for each individual benefit on the Government website.

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