Pension credit is a government benefit to help older people who are on low incomes. Under current rules it’s made up of two elements: Guarantee Credit and Savings Credit. However, Savings Credit is due to be phased out soon.
To be eligible for Guarantee Credit, you must be a permanent resident of Great Britain and either you or your partner must have reached the state pension age for women. The state pension age is currently being increased and equalized for both men and women, and will be 65 in 2018 and 66 by 2020, with further increments in the future.
You will qualify to receive Guarantee Credit if your income is below £148.35 per week if you’re a single person, or £226.50 per week for a couple. Your income includes any earnings (if you’re still in work), your state pensions and any other pension payments, and most social security benefits (e.g. Carer’s Allowance). If your savings and investments exceed £10,000, this will also be counted towards your calculated income at a rate of £1 for every £500.
It’s important to note that you cannot qualify for Guarantee Credit by deferring either your state or private pension. All pension income is calculated as the amount you are entitled to receive, regardless of whether you have actually claimed it. However, the calculation of your income does not include certain benefits, including Disability Living Allowance, Attendance Allowance, Housing Benefit, Council Tax Reduction and Personal Independence Payments.
Savings Credit is an additional payment for those aged 65 or older who have saved money toward their retirement. It will not be payable to anyone who reaches state pension age on or after 6 April 2016.