Pension Credits

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I am a pensioner and have heard about these new credits. What exactly are they?

A pension credit is a means tested benefit for older people available from 6th October 2003. Pension credits consist of two parts and you may be eligible for one or both of these depending on your circumstances.

The two parts are:-

  1. A guarantee credit. This replaces minimum income guarantee (MIG) for people aged 60 or over.
  2. A savings credit. This is available to people over 65 who have a small amount of extra income or savings.

How will I know if I qualify?

You will be eligible if you are aged over 60 and have income below a specified amount:

Single person £102.10
Couple £155.80

These are only broad outlines as you may qualify for premiums if you are disabled or a carer. For the savings credit you need to be over 65 years old and have income between certain limits. The rules are too complex to outline here but CAB can do the calculation for you.

Can I have capital and still be entitled to pension credits?

Yes. If you have capital of less than or equal to £6,000 it will be ignored. If you have capital of over £6,000 you will be assumed to have income of £1 for every £500 over that amount. This assumed income will then be included in the calculation of your entitlement to pension credit.

How do I apply?

You should make a claim on form PC1, by telephone or in person. You can contact the Pension Service on 0800 991234. Your form will be completed over the telephone and sent to you for checking and signing. You will need details and evidence about your income and savings and your national insurance number. If you qualify you will be paid by order book, giro or directly into your bank account.

Last updated: February 22, 2007