State Pension payments are set to increase by 10.1 per cent from April for some 12.6million people across Great Britain, including 992,052 living in Scotland. However, despite a record-breaking rise in payments of the contributory benefit, it is estimated that around 1.8 million pensioners are receiving less than £100 per week in State Pension payments.
There are 9.7million older people receiving Basic State Pension payments of up to £141.85 per week (rising to £156.20 in April), compared to 2.9million getting the New State Pension, which is worth up to £185.15 each week (rising to £203.85 in April).
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown warns at least some of those on the lowest State Pension payments could be missing out on Pension Credit, a benefit delivered by the Department for Work and Pensions (DWP) which is worth more than £3,500 each year in financial support, discounts and other benefits which could increase their income.
Pension Credit could provide financial help to married couples who have a combined weekly income of less than £300, or people living on their own with an income of less than £200 per week.
Ms Morrissey explained: “Many people do not receive anywhere near the full amount of State Pension and there are currently 1.8m people receiving less than £100 per week. The vast majority of these are women who have accrued large gaps in their National Insurance contribution history due to time taken away from the workforce to care for family.”
She added: “Many of these people may well have other sources of income to see them through retirement but for those who don’t, life can be a real financial struggle.”
Pension Credit is a hugely under-claimed means-tested benefit that could provide additional income of up to £306 each week for couples and £201 for those living on their own.
Pension Credit weekly payment rates 2023/24
- Single: £201.05, from £182.60
- Couple: £306.85, from £278.70
The DWP also recently announced a series of new cost of living payments for 2023/24. This includes £150 for those on disability benefits, £300 for eligible pensioner households which will be added to the 2023/24 Winter Fuel Payments and a £900 means-tested cost of living payment.
Successful new claimants for Pension Credit will also be eligible for the £900 payments which will be made in three lump sums over the next financial yea with the first instalment of £301 due between April 25 and May 17, 2023.
In total, eligible pensioners could be due up to £1,350 in additional support through cost of living payments - find out more here.
Pension Credit is a retrospective benefit, which means it can be backdated by up to three months, taking it to within the qualifying period of January 26 and February 25, 2023. So, people who make a new claim before May 19, which later turns out to be successful will receive the £301 cost of living payment and subsequent lump sum payments.
People can 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. We also have details on the handy online Pension Credit calculator which can quickly indicate if your claim may be successful and how much you might get.
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.
Some older people think because they have savings or own their home they would not be eligible for any Pension Credit, but the DWP said hundreds of thousands could be missing out on the extra money and discounts it provides every month.
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 by 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.
Apply online
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.
To keep up to date with the latest State Pension news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
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