Home Money Can YOU claim pension credit? Here’s how to top up your weekly income to at least £203.85

Can YOU claim pension credit? Here’s how to top up your weekly income to at least £203.85

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Pension credit – a vital way to supplement your income if you are elderly and struggling to pay the bills

If you are an older person and not well off, the pension credit tops up your weekly earnings up to a minimum of £201.05 for singles and £306.85 for couples.

This guaranteed minimum income will increase by 8.5 per cent in April, up to £218.15 for single people and £332.95 a week for couples.

Pension credit also opens the door to lots of extra help with household bills.

You can earn thousands of pounds on top, including help with housing costs, heating, council tax, TV licenses and other bills, and receiving pension credit also qualifies you for cost-of-living payments from the Treasury.

Pension credit – a vital way to supplement your income if you are elderly and struggling to pay the bills

The pension credit is set at a few pounds less per week than the full state pension, which is currently £203.85 per week for people retiring since the flat rate system was introduced in April 2016.

Couples where both partners are entitled to the full state pension receive double that amount, as each partner’s state pension is calculated individually.

This means that people who have paid National Insurance all their lives are rewarded with higher incomes, but the pension credit still provides a basic safety net for poorer older people.

Successive governments led by both major parties have committed to and maintained this system to ensure that older people do not live out their final years and die in extreme poverty, without money for necessities such as food, shelter and warmth.

However, despite their efforts to get everyone entitled to claim, many people are still unable to supplement their weekly income with pension credits.

Last year, the government published figures on the use of pension credits which revealed that around 880,000 or six in 10 families who were entitled to them did not claim them in 2021/22.

Up to £2.1 billion was left unclaimed, or around £2,200 a year for each family that was entitled to pension credit but did not claim it.

The pandemic could have skewed the figures, and the Government has been carrying out an awareness campaign urging older people in difficulty to apply for pension credits.

This tells them to ignore myths that might discourage them from applying, including that having savings, a pension or owning a home are barriers.

The Government has also launched a trial aimed directly at people who might be entitled to a pension credit and encouraging them to sign up.

Older people living in households receiving housing benefit in 10 local authorities received “invitation to claim” letters.

However, pensions experts have called on the Government to do more to directly target people who are likely to be eligible and ask them to apply.

What are the advantages of claiming a pension credit to supplement your income?

A successful pension credit claim means an increase in your income if you are eligible, and you also automatically qualify for many additional payments and benefits worth thousands of pounds in total.

– Housing benefit for rent, mortgage and service charges, although the amount will vary depending on housing costs in your area.

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Our pensions columnist Steve Webb explains how housing benefits are assessed here.

– Help with municipal taxes, depending on your personal circumstances and your place of residence.

– Addition of caregiver allowance.

– Addition of major disability.

– Bonuses for dental treatments and glasses.

– Free TV license if you are over 75 years old.

– Discount for warm homes and payment for cold climates.

How much are you allowed to have in savings?

The Government does not want to penalize people for having accumulated some savings during their life.

When you apply, you give up a £10,000 emergency fund, although that sum was set in 2009 and is worth much less these days.

The figure is not a hard limit, just the threshold at which the amount of pension credit being topped up begins to be affected.

Every £500 you have in savings over £10,000 is counted as £1 of income per week when your pension credit is calculated.

> Learn more about the savings rules for pension credit

What other rules do you need to know?

– You must have reached the state retirement age, currently 66 years old, but you can start your application up to four months earlier.

– Applications can go back three months, as long as you have been eligible during that period.

– You are only entitled to the pension if you and your partner (spouse, de facto partner or person with whom you live as a couple) have reached state pension age. There is an exception if one of you receives housing benefit for someone who has passed state pension age. The rules on mixed-age couples were introduced in mid-2019 and apply to people who have registered since then.

– You may be able to get a small extra top-up called a “savings credit” if you reached state pension age before April 6, 2016.

This currently costs £15.94 per week, or £17.84 if you have a partner. In April, this will increase by 6.7 per cent to £17.01 or £19.04.

– You can get a caregiver premium that increases your pension credit entitlement.

If you are over state pension age, this is called ‘carer’s addition’.

Steve Webb explains how the carer’s premium works here and Carers UK has more information here.

– If you defer a state pension or another type of pension, you will be considered to be receiving that income.

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– You can still receive pension credit if you leave the country for up to four weeks, or longer for exceptions such as bereavement or medical treatment.

– Recipients of pension credits are expected to inform the DWP if their circumstances change. Check out this list of Possible changes affecting pension creditin addition to the contact information to be used.

How to apply and where to get help with claims

Find more about pension credit here and about him rules about who is eligible here.

You can apply by phone at 0800 99 1234say online pension credit either Get a form to do it by mail.

A friend or family member can apply on behalf of an older person.

Age UK staff will also help with applications. If you call their free helpline, they will check that you are receiving all the benefits you are entitled to, including pension credit.

Any older person struggling with bills, or friends and family concerned about them, can call 0800 169 65 65.

This line is open every day of the year from 8 a.m. to 7 p.m., or you can visit Age UK help page here.

Age UK also has a free anonymous profit calculator which can provide you with an estimate of what you might be entitled to if you wish to know this information privately.

What happens if your pension credit is rejected?

Applications for pension loans have skyrocketed, but so have rejections, as older people try to increase their income to cover growing household bills.

Reasons for a pension credit application to be rejected include having too much income, not being a UK resident, not providing all the information requested, not applying on time or not being of the right age.

You can ask to have the decision reviewed if you think it is wrong, through a process called “mandatory reconsideration.” This is free and does not require a lawyer or other legal help.

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How much is the state pension?

The full state pension is £203.85 a week or £10,600 a year. This will rise to £221.20 or around £11,500 a year in April.

People who retired before April 2016 on a full basic state pension receive £156.20 per week or £8,120 per year. This amount is expected to rise to £169.50 per week or around £8,800.

The old basic rate is supplemented by additional state pension entitlements (S2P and Serps) if they were earned during years of work.

People who have taken out S2P and Serps to pay less into National Insurance over the years and retire after April 2016 could receive less than the new full state pension.

Workers now need to have 35 years of contributions to get the new fixed-rate state pension, compared to 30 years of qualifying National Insurance contributions to get the old state pension.

But even if you paid in full for 35 years or more, if you contracted for a few years, you could still reduce what you get.

Everyone has the option of deferring their state pension to get more in their later years and can buy state pension top-ups to fill the gaps.

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