About Pension Credit
What is Pension Credit?
Pension Credit is a tax-free payment for those who have reached the minimum qualifying age and live in Great Britain (GB). Pension Credit is paid for out of taxation. Your customer does not need to have paid National Insurance contributions to be eligible. If they are eligible for Pension Credit it is their right to apply for and get it.
The Pension Credit qualifying age is increasing to 65 alongside the increase in women’s State Pension age. To find out when your customer can get Pension Credit, see the Pension Credit Age Table.
The State Pension age for both men and women will rise in the future. The Government has announced new proposals for increasing State Pension age to 66 by 2020, which will mean that women’s State Pension age would increase more quickly to 65 between April 2016 and November 2018.
Changes to the State Pension age are likely to affect the Pension Credit qualifying age.
There are two parts to Pension Credit: Guarantee Credit and Savings Credit.
Guarantee Credit
Guarantee Credit provides financial help for people who have reached the minimum qualifying age and whose income is below a certain level. The level that applies to your customer depends on their circumstances and is called their ‘appropriate amount’.
How much Guarantee Credit they may get will depend on other money they have, such as other pensions and savings. Guarantee Credit payments bridge the gap between the money your customer already has coming in and their ‘appropriate amount’.(This is called the appropriate minimum guarantee in the legislation.)
Savings Credit
Savings Credit is an extra amount for people aged 65 or over who have made some provision for their retirement (such as savings or a second pension) which brings their income above a level set by Parliament, called the Savings Credit starting point. (This is called the Savings Credit threshold in the legislation.) Customers can get Savings Credit on top of Guarantee Credit. They may still get Savings Credit even if their income is above their ‘appropriate amount’.
Who is eligible for Pension Credit?
There are two main rules about who can get Pension Credit. These are about age and residency.
Age: Your customer can only get Pension Credit if they have reached the minimum qualifying age. If they have not reached the minimum qualifying age but their partner has, the partner can apply for Pension Credit. You can find out more information about couples on our page about People living as husband and wife or as civil partners.
To find out the age at which your customer could be entitled to Pension Credit, you can visit our website at www.direct.gov.uk/pccalculator.
Residency: Your customer may only get Pension Credit if they live in GB and they:
- have the right to reside, and are habitually resident, in the United Kingdom (UK), the Channel Islands, the Isle of Man or the Republic of Ireland, or
- have a right to reside, and are treated as being habitually resident, in the UK.
The habitual residence and right to reside rules are explained in the Habitual residence test.
If your customer has come to GB from abroad, they may be able to get Pension Credit, but this depends on their residence or immigration status and on their circumstances.
In some cases, customers may be able to keep Pension Credit if they leave this country temporarily.
