Pension Credit

Pension Credit was introduced in October 2003 to provide those aged 60 and over with a minimum level of income and to give extra money to those aged 65 and over with modest incomes or who have made savings for their retirement. 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.

The scheme has two parts to it: the Guarantee Credit and the Savings Credit. It is possible to receive either component of Pension Credit exclusively or a combination of both.

Guarantee Credit

This part of the scheme is designed to guarantee a minimum income to those aged 60 and over, by topping up your weekly income to a minimum level (in 2009/2010, a top up to £130 if you are single, and to £198.45 if you have a partner). However, if you have caring responsibilities, are severely disabled or have certain housing costs, then you may get more money. Although the individual applying must be at least 60, their partner or spouse can be younger.

From 6 April 2010, the age from which you can get Pension Credit will rise to 65 as follows:

Date of Birth	Pension Credit Age
On or before 5 April 1950	60
6 April 1950 - 5 April 1951	60, rising to 61*
6 April 1951 - 5 April 1952	61, rising to 62
6 April 1952 - 5 April 1953	62, rising to 63
6 April 1953 - 5 April 1954	63, rising to 64
6 April 1954 - 5 April 1955	64, rising to 65
6 April 1955 - 5 April 1959	65

*The pension credit age gradually increases for those born during this period; for example, if you were born on 6 April 1950, you will receive your pension credit at the age of 60 years and 1 month; however, if you were born on 13 January 1951, then you will receive your pension credit at the age of 60 years, 9 months and 24 days.

Savings Credit

The Savings Credit element is designed to reward those who have attempted to make additional provision for their retirement over and above the Basic State Pension, in the form of modest savings or an additional pension. You may be eligible for Savings Credit if you are 65 or older, and have an income of £181 a week if you are single, or up to £266 a week for couples (2009/10 figures). Savings Credit is currently worth up to £20.40 a week for a single person and £27.03 for couples.

Income that is taken into account includes:

Basic State Pension
Private pensions
Occupational pensions
Working Tax Credit
Earnings after tax and expenses from employment or self-employment (less half of any occupational or personal pension contribution you make)
Most social security benefits, such as Carer's Allowance
An 'assumed income' of £1 a week for every £500 (or part of £500) of capital you have over £6,000 (e.g. savings, investments, property that's not your main home); this will rise to £10,000 in November 2009
An 'assumed income' of £1 a week for every £500 (or part of £500) of capital you have over £10,000 f you live permanently in a care home

Income that is ignored includes: