There’s been quite a lot in the news recently about pension credits, especially in connection with the changes in winter fuel payments. So, this month, our blog is all about these benefits and a look at who can claim them.
What are Pension Credits?
Pension Credits is a benefit for people over state pension age, i.e. 66 years and should top up the income of those who only have a small pension. It comes in two parts:
- Guarantee Credit – This tops up the weekly income to a minimum level. For 2025/26, that’s £227.10 per week for a single person and £346.60 for couples.
- Savings Credit – This is an extra payment for people who saved some money towards their retirement, such as through a workplace pension. However, it’s only available to those who reached State Pension age before 6 April 2016.
There may be further income available to those with a disability, other responsibilities such as caring or childcare or with additional costs such as some housing costs. The claimants do not need to have paid national insurance to receive the benefit and it is paid tax-free. Claimants can have up to £10,000 in savings and still be entitled to pension credits
Can employees claim Pension Credits?
This is where this benefit could be of interest to employers or those managing a payroll scheme – the answer is yes.
If the total of all income comes below the minimum amount, then the employee can still claim pension credits. The amount someone earns is taken into account but the first £5 for single people and the first £10 of joint earnings for couples is ignored in most cases.
Other reasons to claim Pension Credits
Pension credits in their own right can bring in vital additional income to pensioners who otherwise would be on a very low fixed income. But successfully claiming pension credits can unlock a number of other benefits. Until 2023, cold weather payments were made to all pensioners regardless of income and were not means tested. This changed last year when the payments were limited to those claiming pension credits although there is some suggestion this may change again.
Other benefits unlocked by pension credits include:
- Free TV Licence (if you’re over 75)
- A Council Tax discount
- Help with NHS costs such as prescriptions, dental costs, and transport for hospital appointments
- Help with housing costs such as housing benefit and mortgage interest support
- Help with heating costs through the Warm Home Discount Scheme
Applying for Pension Credit
Making an application for pension credit is straightforward via the government website, by phone or in writing by completing the claim form.
If an employee is only working a few hours a week, or has a low pension income, it would be worth checking on eligibility as it could make a real difference to the amount of money they receive. We would also encourage employers to ensure their qualifying employees have information on pension credits.