More than 850,000 people are not claiming thousands of pounds in extra cash they’re entitled to – despite it taking just 10 minutes to check eligibility.
More than £1.7 billion in unclaimed pension credit, says charity Turn2us, is sitting untouched because hundreds of thousands of people over the age of 66 do not realise they can claim extra money from the government to top up their retirement income.
The average Pension Credit award is worth over £3,500 per year, says the poverty charity.
It is urging anyone aged over 66, or their family and friends, to spend just a few minutes using the organisation’s online free benefits calculator to find out if they could be getting extra money each month.
Turn2us director of impact and innovation Michael Clarke said: “Research shows lots of pensioners don’t know pension credit exists, and many others rule out finding out as they assume they’re not eligible because of their savings or owning their own home.
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“The reality is a single pensioner getting by on an income of less than £201.05 a week, or a couple with under £306.85 a week, could be eligible even if they’re homeowners with savings of up to £10,000.”
So what is pension credit, who is entitled and how do you get it?
What is pension credit?
Pension credit is designed to top up people’s retirement income when they reach state pension age – giving people extra money to manage living costs. However it currently has the lowest uptake of any income-related benefit in the UK.
Separate from your state pension, it is a means tested benefit which means officials will look at your finances, including your income and capital, to work out whether you qualify for more government help in the form of extra cash each month.
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Paid for by the Pensions Service, which is part of the DWP, you may be able to claim it whether or not you’re still working, albeit earnings are taken into account when calculating your income, but you don’t need to have paid any National Insurance contributions and it is tax free.
The government has set pre-determined weekly income amounts it says people in the UK of state pension age need to live off. These are called ‘appropriate minimum guarantees’.
When you apply for pension credit your current income is calculated – and if you have a partner this is done together. Pensions, certain other benefits, assumed income from savings or investment and any earnings are all added up.
If you have £10,000 or less in savings and investments this will not affect your Pension Credit. If you have more than £10,000, every £500 over £10,000 counts as £1 income a week. For example, if you have £11,000 in savings, this counts as £2 income a week.
What might you get?
Pension credit will top up your income to a guaranteed minimum level if you’re deemed to be falling short.
For the financial year 23/24 this is, according to Age UK, £201.05 if you’re single or £306.85 if part of a couple.
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Your state pension, other income, any money you’re earning and social security benefits such as a carer’s allowance will all be taken into account when calculating the money you have coming in so that it can be compared to those thresholds in order to establish if you need more.
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If you have a severe disability, you might also be able to claim an extra £76.40 a week while those caring for another adult may be entitled to an additional £42.75 a week. If you’re responsible for a child or young person, you could get an extra £61.88 a week for each one you’re looking after.
A path to even more help…
Pension credit is also known as a ‘gateway benefit’. This means the addition of pension credit into your monthly monies, can also serve as a gateway to other help such as council tax reductions, the Warm Home Discount, and housing benefit.
For people aged 75 and over, they are also eligible for a free TV licence as part of the support.
Those in receipt of pension credit have also had a passport, in the last 18 months, to additional help from the government designed to further ease the cost of living crisis. This year this will include an extra £600 in support payments – so even a small pension credit award can open the door to extra money while outgoings remain sky-high.
Martin Lewis, founder of MoneySavingExpert, explained: “It’s a tragedy that up to a million low income pensioners who’ve paid into the system for years are missing out on what can be a crucial financial top up.
“And even those only due thruppence from it should still claim as Pension Credit is the key gateway benefit that opens the door to many other entitlements – including the remaining £600 cost of living support, council tax reductions, free TV licences (if age over 75) dental and optical support and more.
“Any single pensioner earning under roughly £220 a week, or pension couple earning under £320 should check online or call the pension credit helpline just in case you may be due.”
The latest DWP figures suggest pension credit can be worth up to £3,500 per year, depending on a person’s or couple’s circumstances.
How do you claim?
A pension credit application can be started, say officials, four months before reaching state pension age. You can also apply anytime after reaching state pension age, but claims will only be back dated for three months.
Turn2us has its own free benefits calculator here, which people can use to help guide them towards the additional help they might be entitled to. There is also a government pension credit calculator to help you here.
Applications to the Pensions Service can then be made online, by phone or through the post depending on your circumstances and more details about each of those processes and how to begin them is available here.
Those applying will need to provide some personal details including National Insurance numbers and information about incomes, savings and investments.
