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Pension credit

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1. What is pension credit?

Pension credit, also known as state pension credit, is a benefit for people who are on a low income and have reached a certain age.

Pension credit has two parts:

  • guarantee credit - which is a means-tested benefit. It is intended to provide for your basic living expenses. An amount known as an 'appropriate minimum guarantee' is calculated. If your income is below this minimum guarantee, guarantee credit makes up the difference.
  • savings credit - which was intended to give you a small amount of extra money if you have saved for retirement and 'reward' you for having income from earnings, savings or pensions over the level of the basic state pension. Savings credit is being phased out.

You can get both of these parts if you satisfy the rules. If you get guarantee credit, you can be passported to other benefits (such as housing benefit, council tax reduction and free dental treatment). In the case of Sure Start Maternity Grants, funeral payments, cold weather payments (unless you live in a care home) and budgeting loans, savings credit alone will be sufficient to do this.

2. Who can claim pension credit?

To claim pension credit guarantee credit, you must have reached the qualifying age. This is being raised from 60 to 66 between April 2010 and October 2020. To check the qualifying age at the time you want to claim, contact the Pension Service (0800 99 1234) or use the state pension age calculator at www.gov.uk/state-pension-age

If you work, there is no limit to the number of hours you can work and still receive pension credit, but your earnings will be taken into account in the assessment of how much you get.

For both guarantee credit and savings credit, you must satisfy the residence and presence tests (see 7 below) and not be subject to immigration control.

3. The guarantee credit

Guarantee credit is calculated by comparing your appropriate minimum guarantee with your income (see below). Your appropriate minimum guarantee always includes a 'standard minimum guarantee'. This is set at two rates: £159.35 for single claimants and £243.25 for couples.

Additional amounts are paid for severe disability and for carers (see below).

If you have children, you will need to claim child tax credit. For more information on this, see our Factsheet F9 - a guide to tax credits.

The appropriate minimum guarantee will also include any eligible housing costs, including mortgage interest payments. For more information, see our Disability Rights Handbook.

The additional amount for carers

To be entitled to this, you or your partner must be entitled to carer's allowance, even if you are not actually paid it because you receive another benefit. The addition is payable for each person who qualifies.

The additional amount for severe disability

To be entitled to this, you must satisfy all of the following:

  • you must be receiving a qualifying benefit (see below);
  • you must live alone (there are exceptions to this rule, eg if you just live with your partner and they also get a qualifying benefit); and
  • no one gets carer's allowance for looking after you.

The following are ‘qualifying benefits’:

  • the care component of disability living allowance (DLA) at the middle or highest rate;
  • attendance allowance;
  • the daily living component of personal independence payment (PIP); or
  • armed forces independence payment.

The rate for a single person (or couple if just one partner qualifies) is £62.45. The couple rate if both qualify is £124.90.

If your partner is certified as severely sight impaired or blind by a consultant ophthalmologist (or has ceased to be so certified in the past 28 weeks), you can still qualify for the premium even if they do not get a qualifying benefit. You are treated as if you were a single person living alone.


Some types of income are counted in full when working out your guarantee credit. This includes state and private pensions and most social security benefits. However, attendance allowance, DLA and PIP payment are ignored, as is housing benefit. Earnings are taken into account, but £20 of your earnings can be ignored if you get attendance allowance, DLA or PIP. For more information, see our Disability Rights Handbook.

4. The savings credit

Savings credit is being phased out. You can only be paid it if all of the following apply; you (and your partner, if you are part of a couple):

  • are aged 65 or over;
  • reached state pension age by 6 April 2016; and
  • have qualifying income above the savings credit threshold (see below).

Savings credit is paid up to £13.20 a week if you are single, or £14.90 for a couple.

All assessments are based on the amount of ‘qualifying income’ (see below) that you have over a threshold figure, which is £137.35 for single claimants and £218.42 for couples. If your qualifying income is below these thresholds, you cannot get savings credit. 

Qualifying income

Qualifying income is used when assessing your savings credit. This is the total amount of income used to calculate your guarantee credit but excluding:

  • contribution-based jobseeker's allowance;
  • contributory employment and support allowance;
  • incapacity benefit;
  • maintenance payments;
  • maternity allowance;
  • severe disablement allowance; and
  • working tax credit.

5. Capital

If you have capital of more than £10,000, this will affect your pension credit. You will be counted as having an extra £1 a week income for every £500 (or part of £500) over £10,000. This is known as ‘deemed income’. There is no upper capital limit for pension credit. See the Disability Rights Handbook for more information.

6. How to claim

You can call the Pension Credit application line (0800 991 234; textphone 0800 169 0133) to make a claim over the phone or get a form sent to you. Alternatively, an advice agency or local Pension Service staff can help you fill in the form, either at an advice session or through a home visit.

Pension credit can be backdated for up to three months if you have met the qualifying conditions throughout the whole period.

If you are going to become eligible for pension credit in the future - for instance because you are coming up to the qualifying age or you are about to have a drop in income - you can make a claim up to four months in advance of this change.

7. The presence and residence tests

To qualify for pension credit, you must

  • be present in Great Britain*;
  • have the right to reside; and
  • be habitually resident in the United Kingdom, the Channel Islands, the Republic of Ireland or the Isle of Man (see below).

'Present' means physically present in Great Britain*. There are rules that may allow you to be treated as present during a temporary absence. The term ‘right to reside’ is not defined but is dependent on your immigration status and nationality. You might have a right to reside under United Kingdom rules, European Union law or because you are a British citizen.

* or Northern Ireland, if you live there

There is no legal definition of 'habitual residence'. Relevant factors are where you normally live, where you expect to live in future, your reasons for coming to this country, the length of time spent abroad before you came here, and any ties you still have with the country where you have come from.

For more information see the Disability Rights Handbook.

8. Pension credit and universal credit

Universal credit is a new means-tested benefit, which will replace both housing benefit and child tax credit (along with other means-tested benefits).

For more information, see our Factsheet F55 - universal credit.

Once the universal credit has been fully implemented, by which time housing benefit and child tax credit will have been abolished, you will be able to claim for rent support or any dependent children in your pension credit.

9. Where can I get more help or information?

This factsheet is a basic overview of pension credit. You can find out more detailed information in our Disability Rights Handbook. This and all our other publications are available from our shop at https://www.disabilityrightsuk.org/shop

You can also place orders by contacting Disability Rights UK.

You can get help and information at your local advice centre, such as a Citizens Advice. You can get more information about where to get personal advice from our Factsheet F15 - Getting advice. All our factsheets are free to download on our website at disabilityrightsuk.org.

12 June 2017