What is Pension Credit and how much financial support is paid out per week?

An estimated £1.7bn in help for older people going unclaimed every year, according to DWP

Older people are being urged to check whether they are eligible for Pension Credit as the Department for Work and Pensions (DWP) joins forces with charities and broadcasters to raise awareness of a scheme worth as much as £3,500 a year per person.

Nearly 1.4 million people in Britain of state pension age and on a low income already receive the state payout to help with their daily living costs but more than 800,000 more could be missing out, according to MoneySavingExpert founder Martin Lewis, meaning that approximately £1.7bn in help is going unclaimed every year.

As part of its awareness drive, the DWP has also announced a forthcoming “Invitation to Claim” initiative that will see households that are potentially eligible and already in receipt of Housing Benefit across 10 local authorities sent letters encouraging them to apply for Pension Credit.

“We recognise the challenges some pensioners will be facing with the cost of living which is why, alongside driving down inflation, promoting Pension Credit is a priority,” said Laura Trott, minister for pensions.

“During our week of action, we will be out and about spreading the word – and you can help too. Speak to your older loved ones about Pension Credit and get them to check if they could be eligible for this vital extra support, worth an average of £3,500 per year.”

Here is everything you need to know about Pension Credit.

How can I check if I am eligible?

To qualify for the additional state support offered by the Pension Credit scheme, you must live in England, Scotland or Wales and have reached the state pension age, which you can check on via this handy tool available on the government website.

Northern Ireland has its own arrangements for pensioners, which you can read about here.

When you apply, you will be asked whether you have a partner (defined as a husband, wife, civil partner or someone you live with as a couple but to whom you are not married) and, if so, your income will be calculated together to determine whether you meet the requirements to merit a top up.

The income calculation takes into account any state or other pensions you might have, earnings from employment or self-employment and most social security benefits, such as Carer’s Allowance (CA).

Other benefits are excluded from the calculation, however, so receipt of Adult Disability Payment (ADP), Attendance Allowance (AA), Christmas Bonus, Child Benefit, Disability Living Allowance (DLA), Personal Independence Payment (PIP), social fund payments like Winter Fuel Allowance, Housing Benefit or Council Tax Reduction would not count as income.

If you are entitled to a personal or workplace pension and have yet to claim it, the amount you would expect to get still counts as income. The value of a deferred state pension would also be counted.

If you have £10,000 or less in savings and investments, this will not affect your Pension Credit, but every £500 you have stored away above £10,000 counts as £1 income a week, according to DWP rules.

You can find out more about Pension Credit eligibility here and access a useful calculator tool here.

How much is Pension Credit per week?

The benefit is designed to increase a single recipient’s income to a minimum of £201.05 per week and a couple’s to £306.85, while a person with a disability or caring responsibilities may receive even more (see below).

The money is typically paid directly into your bank account.

Taking receipt of even a small Pension Credit award has the added benefit of opening the door to other support measures you may be eligible for, including help with housing costs, council tax, heating bill and cost of living support payments.

Does receiving Personal Independence Payment affect your Pension Credit award?

Anyone with a severe disability can get an additional £76.40 a week of Pension Credit if they qualify for the daily living component of PIP or, for that matter, AA, the middle or highest rate from the care component of the DLA, an Armed Forces Independence Payment or the daily living component of the ADP at the standard or enhanced rate.

Similarly, those responsible for caring for another adult can receive an extra £42.75 a week if they already receive CA or have claimed for it but do not receive it because they already get another benefit paying a higher amount.

Those caring for a child or young person aged under 20 in secondary education or in training could get an extra £61.88 per person under their charge. This is increased to £72.31 a week for the first child if they were born before 6 April 2017.

If that child or young person is disabled, the carer could receive a further £33.67 if they already receive DLA, PIP or ADP or £104.86 a week if they are blind or have another severe disability.

You can find out more about Pension Credit payments and qualification here and more about PIP here.

How can I claim Pension Credit?

You can apply online via the government’s website and will need your National Insurance number, records of your savings and investments and your bank details to hand when you do so.

If you prefer to apply by phone, you can do so between 8am and 6pm from Monday to Friday via the contact details listed below:

• Telephone: 0800 99 1234
• Textphone: 0800 169 0133
• Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 99 1234

To apply by post, print out and fill in the Pension Credit claim form or call the claim line to request that a form be sent to you. This must then be returned to the following address:

The Pension Service 8, Post Handling Site B, Wolverhampton, WV99 1AN

If you subsequently wish to challenge a decision regarding your Pension Credit award, you can find out more about requesting a mandatory reconsideration here.

Finally, you can find out more about reporting a change to your circumstances here.