DWP urged to lower income threshold for £3,900 annual boost for people over State Pension age

The Department for Work and Pensions (DWP) has been urged to reduce the income threshold for Pension Credit “just a little” to enable more older people on a low income to qualify for the benefit, worth an average of £3,900 each year. Labour MP Steve McCabe put the proposal to the DWP during questions in Parliament on Monday.

He said: “We must all be aware of a growing number of pensioners who are struggling with rent, Council Tax and other cost of living increases. Given that state of affairs, does the Minister think there may be an argument that the threshold to access Pension Credit is too high and that if he were to lower it just a little, he would help a great many more people who are obviously struggling?”

Pensions Minister Paul Maynard highlighted the recent 8.5 per cent increase to the New and Basic State Pensions and last year’s 10.1 per cent rise. He added: “We have spent billions on supporting pensioners through the cost of living crisis. As we established in the exchanges earlier, pensioner poverty remains stable.”

Earlier in the session, Dame Angela Eagle highlighted how two million pensioners are living in poverty, with the numbers rising. She said: “Despite the Minister’s bluster, the Government’s own statistics show that well over a third of pensioners entitled to Pension Credit are not receiving it, which saves his Department almost £3 billion a year.

“Even when pensioners do apply, the Minister’s Department is missing its own 10-week service standard for processing new claims in nearly a quarter of all cases. Why is his Department so reluctant to ensure that pensioners are receiving the benefits they are entitled to?”

Mr Maynard said the UK Government is “putting an enormous amount of effort into improving the uptake of Pension Credit” and pointed out that the number of new claims for the 2022/23 financial year were up 80 per cent on the year before.

Pension Credit in a nutshell

Nearly 1.4 million older people across Great Britain, including more than 126,800 living in Scotland, are currently receiving the means-tested benefit that could provide nearly £4,000 in extra support during the year ahead.

However, the latest figures from the DWP suggest there are still 880,000 eligible pensioners not claiming the benefit they are entitled to.

Below is an overview of the benefit, including who should check eligibility, how to go about it, how much you could get, and where to get help filling in the form.

Who can claim Pension Credit?

There are two types of Pension Credit - Guarantee Credit and Savings Credit.

To qualify for Guarantee Pension Credit , you must be State Pension age (66). Your weekly income will need to be less than the minimum amount the UK Government says you need to live on.

For 2024/25, this is £218.15 for a single person and £332.95 for a couple - this amount could be higher if you're disabled, a carer or have certain housing costs.

You can only get Savings Credit if:

  • you reached State Pension age before April 6, 2016, or you have a partner who reached State Pension age before this date and was already receiving it

  • you have qualifying income of at least £189.80 a week for a single person and £301.22 a week for a couple

How much could you get?

Guarantee Credit tops up your weekly income to:

  • £218.15 for a single person

  • £332.95 for a couple (married, in a civil partnership or cohabiting)

You might be able to get more than this if you're disabled or a carer, or you have certain housing costs.

Savings Credit can give you up to:

  • £17.01 a week for a single person

  • £19.04 a week for a couple (married, in a civil partnership or cohabiting).

The exact amount you’ll get depends on your income and savings. Your income includes assumed income from savings and capital over £10,000.

Quickest way to check eligibility for Pension Credit

Older people, or friends and family, can quickly check their eligibility and get an estimate of what they may receive by using the online Pension Credit calculator on GOV.UK here.

Alternatively, pensioners can contact the Pension Credit helpline directly to make a claim on 0800 99 1234 - lines are open 8am to 6pm, Monday to Friday. Due to the bank holiday on Monday, May 6 all DWP phone lines and offices will be closed, but will reopen on Tuesday.

Independent Age offers free and confidential advice, their helpline number is 0800 319 6789, you can also email them at helpline@independentage.org. Full contact details can be found on their website here.

Other help if you get Pension Credit

If you qualify for Pension Credit you can also get other help, such as:

  • Housing Benefit if you rent the property you live in

  • Support for Mortgage Interest if you own the property you live in

  • Council Tax discount

  • Free TV licence if you are aged 75 or over

  • Help with NHS dental treatment, glasses and transport costs for hospital appointments

  • Help with your heating costs through the Warm Home Discount Scheme

  • A discount on the Royal Mail redirection service if you are moving house

Mixed aged older couples and Pension Credit

In May 2019, the law changed so a ‘mixed age couple’ - a couple where one partner is of State Pension age and the other is under it - are considered to be a ‘working age’ couple when checking entitlement to means-tested benefits.

This means they cannot claim Pension Credit or pension age Housing Benefit until they are both State Pension age. Before this DWP change, a mixed age couple could be eligible to claim the more generous State Pension age benefits when just one of them reached State Pension age.

An elderly man and woman are sitting outside at a garden table looking at a document while working on a laptop
Pension Credit can provide financial help to older people on a low income. -Credit:Getty

How to use the Pension Credit calculator

To use the calculator on GOV.UK, you will need details of:

  • earnings, benefits and pensions

  • savings and investments

You’ll need the same details for your partner if you have one.

You will be presented by a series of questions with multiple choice answer options.

This includes:

  • Your date of birth

  • Your residential status

  • Where in the UK you live

  • Whether you are registered blind

  • Which benefits you currently receive

  • How much you receive each week for any benefits you get

  • Whether someone is paid Carer’s Allowance to look after you

  • How much you get each week from pensions - State Pension, private and work pensions

  • Any employment earnings

  • Any savings, investments or bonds you have

Once you have answered these questions, a summary screen shows your responses, allowing you to go back and change any answers before submitting. The Pension Credit calculator then displays how much benefit you could receive each week.

All you have to do then is follow the link to the application page to find out exactly what you will get from the DWP, including access to other financial support.

There’s also an option to print off the answers you give using the calculator tool to help you complete the application form quicker without having to look out the same details again. Try the Pension Credit Calculator for yourself or your family member to make sure you’re receiving all the financial support you are entitled to claim.

Who cannot use the Pension Credit calculator?

You cannot use the calculator if you or your partner:

  • are deferring your State Pension

  • own more than one property

  • are self employed

  • have housing costs (such as service charges or Crown Tenant rent) which are neither mortgage repayments nor rent covered by Housing Benefit

How to make a claim

You can start your application up to four months before you reach State Pension age. You can claim any time after you reach State Pension age but your claim can only be backdated for three months.

This means you can get up to three months of Pension Credit in your first payment if you were eligible during that time.

You will need:

  • your National Insurance number

  • information about your income, savings and investments

  • your bank account details, if you’re applying by phone or by post

If you’re backdating your claim, you’ll need details of your income, savings and investments on the date you want your claim to start.

Apply online

You can use the online service if:

  • you have already claimed your State Pension

  • there are no children or young people included in your claim

To check your entitlement, phone the Pension Credit helpline on 0800 99 1234 or use the GOV.UK Pension Credit calculator here to find out how much you could get.

Join our Daily Record Money WhatsApp community here to receive alerts on the latest money news from benefits to shopping deals.