Pension credit explained
What is pension credit?
If you're on a low income, there is help available to boost your state pension. This comes in the form of pension credit.
Pension credit is a means-tested benefit, meaning it's awarded to you based on your earnings.
It's made up of two parts: guarantee credit and savings credit. You may be eligible for one or both.
Pension credit is worth around £3,300 a year on average for claimants, but around a third of people who are eligible fail to claim it, according to the government.
This guide explains how pension credit works, and who's eligible for it.
What is guarantee credit?
Guarantee credit tops up your weekly income to £218.15 for single people and £332.95 for couples in 2024-25. To qualify for it, you must:
- live in the UK
- have reached pension-credit qualifying age (the same as state pension age)
- have weekly income below £218.15 if you're single and £332.95 if you're in a couple.
If you're a carer, have severe disabilities or certain housing costs, you might qualify for more guarantee credit.
When you apply for guarantee credit, the government looks at all of your income.
This includes both your basic and additional state pension, any income from other pensions, income from any jobs you have and any savings over £10,000.
Some benefits, such as housing benefit, council tax reduction and attendance allowance, aren't included, nor are your personal possessions or your home.
Additional pension credit benefits
Depending on your circumstances, there are some additional allowances that may be added to your Guarantee Credit entitlement.
- If you're a carer and are entitled to Carer's Allowance, you could get an additional £45.60 per week (2024-25) with the Carer Addition.
- If you're severely disabled and eligible for disability benefits, you could get an additional £81.50 per week (2024-25) with the Severe Disablement Allowance.
- If you're responsible for a child or you have to pay housing costs, you may also be eligible for a higher amount.
- You may also be entitled to Warm Home Discount - a payment of £150 (2024-25) to help those struggling to pay their energy bills during winter.
It's worth claiming Pension Credit even if you're only entitled to a few pounds. This is because it can help you to qualify for other benefits.
For example, receiving Guarantee Credit means that you can apply for pension-age Housing Benefit if you rent your home. If you own your home and pay housing-related charges, you may also be eligible for extra amounts within Pension Credit, and you may also qualify for Council Tax Reduction.
What is savings credit?
The government will give people a little extra money to reward them for saving towards their retirement. This comes in the form of savings credit.
Savings credit is only available for people who reached state retirement age before April 2016. However, if you're in a couple and your partner reached state pension age before 6 April 2016, you could still qualify.
There's a few criteria that you needed to meet (and still do) before you qualified for savings credit:
- you have a minimum income of £189.80 a week if you're single, and £301.22 a week if you're in a couple in 2024-25
- you reached state pension age before 6 April 2016
- you must be living in the UK
- you must have made some provisions for your retirement, such as savings or a second pension.
The maximum savings credit you can get per week is £17.01 for a single person and £19.04 for couples.
However, the more money you have, the less you get in savings credit.
For every £1 by which your income exceeds the savings-credit threshold (£189.80 a week if you're single, and £301.22 a week if you're in a couple), your savings credit is reduced by 40p.
All of your income is added together to work out how much you'll get.
If you have any savings, the first £10,000 isn't counted. Then every £500 you have over that amount counts as £1 of income.
Pension credit calculator
There is a pension credit calculator on the gov.uk website to help you check your eligibility for pension credit.
The calculator will also give you an estimate of the pension credit payment you are due for based on your earnings, benefits, pensions, savings and investments.
How do I claim pension credit?
There are two ways you can claim pension credit.
You can either post form PC1 (downloadable from the Gov.uk website) to your local pension centre, or phone The Pension Service on 0800 99 1234.
Visit The Pension Service's Find your pension centre page to find out where yours is and how to contact it.
To claim, you will need your National Insurance number, information about your income, savings and investments and your bank account details,