Pension Credit was introduced in October 2003. It replaced Income Support and the Minimum Income Guarantee for people aged 60 and over. It is split into two parts; the Guarantee Credit and the Savings Credit.

The retirement age for women is rising from 60 to 65 between 2010 and 2020; consequently the age for qualifying for Guarantee Pension Credit will rise at the same time.

Guarantee Credit

To be entitled to guarantee credit you or your partner need to be aged 60 or over and have no income or income below the appropriate minimum guarantee credit, this is a similar calculation to the Income Support applicable amount calculation (see above).

If you receive the guarantee credit you should also be entitled to full Housing Benefit and Council Tax Benefit, free prescriptions and other health benefits, and social fund payments where applicable.

Savings Credit

Savings credit can be paid if you or your partner are over 65. It is intended to assist people who have savings or retirement income and who would ordinarily not receive any other additional benefit apart from their state retirement pension.

If you have savings over £6,000 this will affect any amount that you are entitled to receive. There is no upper limit to the savings that you can have.

How to claim

Claims can be made by calling the Pension Credit Application line on 0800 99 1234 (text phone 0800 169 0133). You can also ake a claim for Housing Benefit and/or Council Tax Benefit at the same time as the Pension Service will pass your information on to your local council to enable them to calculate if you are entitled to Housing Benefit and/or Council Tax Benefit.

Approaching Pension Age
 

Notification

You should receive an invitation to claim State Retirement Pension (SRP) about 4 months before you reach retirement age you should also receive information on Pension Credit. If you have not heard from the Pension Service contact your local office on 0845 60 60 265 to request a SRP claim form.

Severe Disablement Allowance

If you are claiming Severe Disablement Allowance (SDA) you can continue to claim it after pension age and also claim Retirement Pension. If your SDA is more than your pension you will find that your pension is topped-up by the difference. If your SDA is less than your pension it will be wiped out. You won't be any worse off.

If you are not already on any benefits

If you are not on any benefits you have the choice of deferring your pension to earn increments (interest). If you defer your SRP for at least 12 months you will receive a lump sum payment equal to the amount of pension you would have received plus interest.

Remember that Retirement Pension is taxable, so if you are already paying Income Tax on other income there might be an advantage to deferring your pension. Also remember that you can still receive your Retirement Pension even if you are working.

To find out more about Pensions and Pension Credit visit www.direct.gov.uk.