Pensioners born before 1960 are being urged to claim Pension Credit, a benefit that could add up to £1,574 to their monthly income, as new estimates suggest more than 900,000 eligible retirees are missing out on the support.
Under the new Chancellor John Healey, the Department for Work and Pensions is encouraging older people to check their eligibility for the means-tested benefit, which remains one of the most underclaimed entitlements in the UK. Pension Credit is designed to top up weekly income to a guaranteed minimum level, providing a vital financial boost for those on lower incomes.
How much could you receive?
Pension Credit tops up weekly income to £238 for a single person and £363.25 for couples. This means a single person could receive up to £1,574 per month, while couples could see a similar monthly increase, depending on their existing income. The exact amount paid depends on how much money an individual or couple already receives each month from other sources such as state pensions, private pensions or savings.
According to the Money Saving Expert website, the average Pension Credit award is worth around £4,300 a year. The site notes: "If you're retired and have income less than £238 a week as an individual, or £363 a week as a couple, you may be due Pension Credit worth £4,300 a year, on average. Plus, it entitles you to a whole raft of other benefits."
Despite this, many pensioners fail to put in a claim. Money Saving Expert added: "About 2.3 million are eligible for Pension Credit, but it's estimated that around 910,000 don't claim – in many cases because they don't realise they could be entitled to it."
Why do so many miss out?
Pension Credit is often overlooked because people either aren't aware it exists, assume they won't qualify, or believe the amount they would receive is too small to be worth the hassle. However, even a small Pension Credit award can act as a gateway to a range of other benefits and discounts that can make a significant difference to a retiree's quality of life.
One of the most valuable add-ons is the Warm Home Discount, a £150 payment normally applied to electricity bills for eligible households during the winter months. Pensioners who qualify for Pension Credit may also be entitled to a free TV Licence if they are aged 75 or over. Previously, the over-75s only qualified for a free licence if they received Pension Credit, so claiming the benefit can unlock this perk as well.
Other potential benefits include help with housing costs, reductions in Council Tax, support with NHS costs, and additional financial assistance in certain circumstances. The full list of passported benefits is extensive, meaning even a modest Pension Credit award can be worth substantially more than the direct cash payment.
Who is eligible?
Pension Credit is available to people who have reached state pension age, which is currently 66 for both men and women. The government has specifically targeted those born before 1960 in its latest campaign, as this group is more likely to be on a low income and yet may not have claimed the benefit since retiring. In practice, anyone over state pension age with an income below the thresholds should check their entitlement.
Income for Pension Credit purposes includes state pension, other pensions, earnings from employment or self-employment, and most benefits such as Carer's Allowance or contribution-based Jobseeker's Allowance. Savings and capital over £10,000 are also taken into account, with a notional income of £1 per week for every £500 over that amount. People with savings under £10,000 are not affected by the savings rule.
There are two parts to Pension Credit: Guarantee Credit, which tops up income to the minimum levels, and Savings Credit, which provides extra money for people who saved some income towards their retirement. The Savings Credit element is only available to those who reached state pension age before 6 April 2016, which means people born before 1950 typically. The new campaign focuses on the Guarantee Credit element, which is more widely available.
How to claim
Claiming Pension Credit is straightforward and can be done by phone or by post. The Pension Credit claim line is open Monday to Friday, and a claim can be made up to four months before reaching state pension age. The process involves providing details about income, savings and bank account information. The Department for Work and Pensions advises that people should have their National Insurance number and details of any pensions or benefits to hand when they call.
For those who are unsure whether they qualify, an online benefits calculator is available on the Money Saving Expert website and the government's own entitlement checker. Citizens Advice also recommends that pensioners with an income close to the threshold should always make a claim, as even a small award can trigger passported benefits.
John Healey, the new Chancellor, has reportedly backed the campaign to encourage more pensioners to claim. While no new policy changes have been announced, the renewed emphasis on Pension Credit comes as part of a wider push to ensure older people are not missing out on financial help during the cost-of-living crisis.
Impact on pensioners
For a single pensioner living on just the basic state pension, a successful Pension Credit claim could mean the difference between struggling and managing comfortably. The extra income can be used to cover rising energy bills, food costs and other essentials. With the £150 Warm Home Discount attached, the cumulative value of the support can be significant.
It is a common misconception that Pension Credit is not worth claiming if the award is small. However, the passported benefits can be worth far more than the direct payment, meaning even a tiny award could result in substantial extra support.
The message to pensioners is clear: check your eligibility today. With an estimated 910,000 people already missing out, there is a real chance that many readers could be entitled to this support. As the Money Saving Expert team puts it, the benefit is "worth £4,300 a year, on average" and can be claimed by those who meet the income thresholds.
In summary, Pension Credit remains a crucial safety net for retirees on low incomes. The government's campaign, led by Chancellor John Healey, aims to reduce the number of unclaimed entitlements and ensure that every eligible pensioner receives the financial support they are owed. If you are retired and your income is below £238 a week as an individual, or £363.25 a week as a couple, it is worth making a claim.
