Pension Credit

Pension credit is a means-tested benefit for people aged 60 or over. It has two parts - a guarantee credit and a savings credit. Guarantee credit tops up your weekly income to a guaranteed level and savings credit is for people who have a small amount of income or savings.

You may be able to claim either part of the Pension Credit separately or together, depending on your circumstances.

You can claim Pension Credit whether or not you are working, and do not need to have paid national insurance contributions to get the benefit.

Arrangements for claiming and paying pension credit are run by the Pension Service.

You can get the guarantee credit if you are aged 60 or over (it does not matter if your partner is under 60), living in the UK and entitled to claim benefits here, and have income below a certain amount. You can get the savings credit if you or your partner is aged 65 or over. (It does not matter who makes the claim for Pension Credit), you are living in the UK and entitled to claim benefits here, and you have income below a certain amount.

The Pension Service will start off by working out your 'appropriate minimum guarantee'. This is a weekly minimum figure that is guaranteed to people of 60 and over and depends on your personal needs.

They will also work out what income you have. They then calculate how much guarantee credit (if any) you can get and whether you are also due savings credit.

The appropriate minimum guarantee is made up of a standard amount (the 'standard minimum guarantee') which is currently £119.05 a week for a single person and £181.70 a week for a couple. In addition to this, further payments are available for severe disability, carers and housing costs.

Working out the pension credit is complicated. You can find out more about the calculation on the Pension Service website or consult an experienced adviser, for example, at a Citizens Advice Bureau.

Anyone who was receiving minimum income guarantee (MIG) before 6 October 2003, the Pension Service will have been automatically transferred to Pension Credit.

Last Updated: February 2008 © Moneyextra.com

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