The Money Saving Expert has created a list of ways people of all ages can increase their later-life income. In the latest edition of the MSE newsletter, Martin Lewis shares how individuals can boost their state, personal and workplace pension pots to maximise their retirement finances.
The consumer champion explained it's not just for those who are due to retire in the upcoming years, but also ways for those already claiming their state pension to benefit. A state pension is a contributory benefit administered by the Department for Work and Pensions reports The Daily Record.
Some individuals on state pension could be eligible for Pension Credit, which could unlock discounts on Council Tax, housing costs and heating bills. On average the benefit can be worth over £3,500 a year, and so Martin urges single pensioners with an income of less than £220 a week or older couples with under £320 a week to see if they are eligible.
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Writing in the MSE.com newsletter, he said: ‘Nearly a million pensioners are missing out on Pension Credit, a vital benefit worth £1,000s a year for many, which tops up your income.” The expert also explains that whilst people think it may not be worth claiming as they won't get much support, that "even if you'd only get a quid or two, I call Pension Credit a 'gateway benefit' as it opens the door to a whole host of other payments too such as cost of living support, Council Tax Reductions, free TV licences (for over-75s) and more which can be worth thousands.”
He urged people to read the full help guide on MSE.com. People can quickly check their eligibility for Pension Credit using the online calculator or by calling the Pension Credit helpline on 0800 99 1234.
Below is everything you need to know about the benefit to make a claim for yourself, a family member or friend.
What is Pension Credit?
Pension Credit currently gives 1.4 million people across the UK extra money to help with living costs if they are over State Pension age and on a low income.
Pension Credit tops up weekly incomes to a guaranteed minimum level of £201.05 a week for single pensioners or £306.85 for couples. It is a tax-free payment for those who:
- have reached Pension Credit qualifying age, which is State Pension age (66)
- live in Great Britain
Someone may still get Pension Credit if they:
- have not paid National Insurance contributions
- have some savings or a small pension
- live with their grown-up family
- own their own home
Who should check for Pension Credit eligibility
If they are over 65 and reached their State Pension age before April 6, 2016, they could still qualify for Pension Credit if their weekly income is less than:
- £218.80 if they are single
- £319.20 if they are a couple
New Pension Credit claims and £301 cost of living payment
The DWP is also encouraging low-income pensioners not already getting Pension Credit to check their eligibility, as they can still qualify for the £301 cost of living payment if they make an application for Pension Credit before May 19, 2023, which later turns out to be successful.
This is because Pension Credit is a retrospective benefit that can be backdated by up to three months, taking it to within the qualifying period (January 26 - February 25)
Other help if you get Pension Credit
If you qualify for Pension Credit you can also get other help, such as:
- Housing Benefit if you rent the property you live in
- Support for Mortgage Interest if you own the property you live in
- Council Tax discount
- Free TV licence if you are aged 75 or over
- Help with NHS dental treatment, glasses and transport costs for hospital appointments
- Help with your heating costs through the Warm Home Discount Scheme
- A discount on the Royal Mail redirection service if you are moving house
Mixed-aged older couples and Pension Credit
In May 2019, the law changed so that a ‘mixed age couple’ - a couple where one partner is of State Pension age and the other is under it - are considered to be a ‘working age’ couple when checking entitlement to means-tested benefits.
This means they cannot claim Pension Credit or pension age Housing Benefit until they are both State Pension age. Before this DWP change, a mixed age couple could be eligible to claim the more generous State Pension age benefits when just one of them reached State Pension age.
How to use the Pension Credit calculator
To use the calculator on GOV.UK, you will need details of:
earnings, benefits and pensions
savings and investments
You’ll need the same details for your partner if you have one.
You will be presented with a series of questions with multiple choice answer options.
This includes:
- Your date of birth
- Your residential status
- Where in the UK you live
- Whether you are registered blind
- Which benefits you currently receive
- How much you receive each week for any benefits you get
- Whether someone is paid Carer’s Allowance to look after you
- How much you get each week from pensions - State Pension, private and work pensions
- Any employment earnings
- Any savings, investments or bonds you have
Once you have answered these questions, a summary screen shows your responses, allowing you to go back and change any answers before submitting. The Pension Credit calculator then displays how much benefit you could receive each week.
All you have to do then is follow the link to the application page to find out exactly what you will get from the DWP, including access to other financial support.
There’s also an option to print off the answers you give using the calculator tool to help you complete the application form quicker without having to look out the same details again. Try the Pension Credit Calculator for yourself or family member to make sure you’re receiving all the financial support you are entitled to claim.
Who cannot use the Pension Credit calculator?
You cannot use the calculator if you or your partner:
are deferring your State Pension
own more than one property
are self employed
have housing costs (such as service charges or Crown Tenant rent) which are neither mortgage repayments nor rent covered by Housing Benefit
How to make a claim
You can start your application up to four months before you reach State Pension age. You can claim any time after you reach State Pension age but your claim can only be backdated for three months.
This means you can get up to three months of Pension Credit in your first payment if you were eligible during that time.
You will need:
your National Insurance number
information about your income, savings and investments
your bank account details, if you’re applying by phone or by post
If you’re backdating your claim, you’ll need details of your income, savings and investments on the date you want your claim to start.
You can use the online service if:
you have already claimed your State Pension
there are no children or young people included in your claim
To check your entitlement, phone the Pension Credit helpline on 0800 99 1234 or use the GOV.UK Pension Credit calculator here to find out how much you could get.
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