Are you missing out on Pension Credit? How to claim the benefit worth £4,300 a year

Thousands of pensioners continue to miss out on Pension Credit, despite being eligible for the top-up benefit.

Pension Credit is worth £4,300 a year on average, and unlocks access to other benefits like help with NHS costs, a free TV licence and the Warm Home Discount.

Pension Credit applications rose sharply following last summer’s announcement by chancellor Rachel Reeves that the Winter Fuel Payment, previously a universal benefit to all pensioners, would be means-tested.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Pension Credit claims were up 44% between 29 July 2024 and 27 July 2025 compared with the same period a year earlier, according to the latest government data.

The rush to claim created a backlog, with pensioners warned it could take several months for their applications to be processed.

However, the number of applications has now started to stabilise. Claims have fallen by 16% since the end of March this year compared with the same period in 2024 (1 April to 25 August 2024), marking a return to more stable levels.

The backlog has also been cut from a peak of 85,600 outstanding claims in mid‑December 2024 to 12,100 by mid‑August 2025.

In total, the Department for Work and Pensions (DWP) cleared 344,700 Pension Credit claims in the year since the controversial Winter Fuel Payment announcement was made on 29 July. Of these, 181,100 Pension Credit claims were awarded, but a massive 163,500 claims were not awarded, marking an 88% rise year-on-year of applications that were turned down.

The government performed a U-turn on the Winter Fuel Payment a few months ago, saying that the majority of pensioners would now receive it in future (now, the main criteria is to be of state pension age and have annual taxable income of £35,000 or less). So, it is no longer necessary to claim Pension Credit in order to get the Winter Fuel Payment.

Nonetheless, Pension Credit remains an important benefit, topping up a retiree's income, and opening the door to other financial perks. It can be claimed even if you have a pension or own your own home.

Pension Credit is one of the most underclaimed and misunderstood benefits. About a third of eligible people fail to claim.

Stephen Lowe at retirement specialist Just Group comments: “There has clearly been a significant boost in Pension Credit take-up with nearly 100,000 more applications annually following the Winter Fuel Payment announcement. This will be seen as a notable success in bolstering take-up of a crucial benefit targeted at lower income pensioners.

“However, it remains a drop in the context of the estimated 700,000 families that are eligible for Pension Credit and not claiming it. These people may be failing to claim for a number of reasons – they may simply be unaware of the benefit, not know how to claim or assume they are not eligible if they own their own home.”

We explain everything you need to know about Pension Credit, and the various ways to apply.

What is Pension Credit?

Pension Credit is worth £4,300 a year on average, but could be worth more to certain households. It also unlocks access to other benefits, such as cold weather payments, help with NHS costs, and the £150 Warm Home Discount.

Anyone who is unsure whether they or a loved one is entitled to Pension Credit can check using the government's online Pension Credit calculator.

It is separate from the state pension, and paid to people of state pension age on low incomes, even if they have savings, a personal or workplace pension, or own their own home.

The benefit is made up of two parts: guarantee credit and savings credit. The former tops up your pension income to a certain level. The latter is only available to those who reached state pension age before 6 April 2016 and had some money saved for retirement, for example in a personal or workplace pension.

Even if Pension Credit will only provide a small amount of money to you, it’s worth claiming as it means you will qualify for other benefits:

• Support for mortgage interest (SMI) if you own the property you live in
• Housing benefit if you rent the property you live in
• Council tax reduction
• A free TV licence if you’re aged 75 or over
• Help with NHS dental treatment, glasses and transport costs for hospital appointments
• Cold weather payments
• £150 Warm Home Discount
• Christmas bonus (only for those who receive the guarantee element of Pension Credit)
• A discount on Royal Mail redirection service for those moving home

The Warm Home Discount was previously limited to those on the guaranteed element of Pension Credit, or those receiving the savings element who had high energy costs, but Labour has widened the scheme.

Individuals on Pension Credit, who are the named billpayer in their household, will get the £150 discount off their energy bills this winter.

Why have so many people failed to claim Pension Credit in the past?

Pension Credit is one of the most underclaimed government benefits, with a complex eligibility criteria. Some pensioners assume that if they own their own home they won't qualify. This is incorrect, as they may be entitled to claim it. If they have savings or a pension, they may also qualify for Pension Credit.

However, while Pension Credit claims have risen since last July, there has also been a large increase in applications being rejected.

Tom Selby, director of public policy at the investment platform AJ Bell, notes: “While it makes sense to submit a claim if you’re close to the eligibility threshold and aren’t quite sure whether you’re eligible, the large number of rejected claims suggests there is still widespread misunderstanding of the eligibility rules.”

Even those who do successfully claim it may not be receiving as much money as they should. Some pensioners who receive Pension Credit may be missing out on extra money, due to not updating their financial information with the DWP. For example, if their savings reduce they could be entitled to a higher amount of Pension Credit.

One in 10 Pension Credit claimants are missing out on their share of about £100 million due to failing to provide the DWP with accurate information, according to government figures.

Lowe at Just Group says: “About 10% of claimants did not get their full entitlement in 2024-25 compared to 8% the previous years. The amount being underclaimed was also higher at £100 million compared to £80 million previously.”

Lowe said the DWP put the underpayments down to claimants failing to provide accurate or up-to-date information, mainly in three areas – a reduction in financial assets, a non-dependant moving out, or a fall in income from private pensions.

Lisa Picardo, chief business officer UK at PensionBee, says that with about 700,000 eligible pensioner households still missing out on Pension Credit, which could be worth thousands of pounds a year, the government has a big challenge ahead.

“Low take-up rates, which have hovered between 61% and 66% for over a decade according to the government’s own data, underline how urgently we need clearer communication, simpler claims processes and a joined-up strategy to ensure every eligible household receives what they are entitled to. No one should face pensioner poverty because of an administrative barrier or lack of awareness,” she comments.

Governments have run multiple awareness campaigns to encourage more people to claim the benefit. The DWP says it is exploring further options to "drive up claims by reaching the most isolated and poorest pensioners who are eligible for support". This includes "writing to all pensioners who make a new claim for Housing Benefit and who appear to be entitled to Pension Credit".

It also says it has updated the online claim form so it takes just 16 minutes on average to apply for Pension Credit.

How much is Pension Credit worth?

The minimum guarantee for Pension Credit – the minimum amount that someone on Pension Credit will receive – rose by 4.1% in April 2025, thanks to the state pension triple lock. This is a mechanism which increases the state pension by the highest out of inflation, average earnings growth and 2.5%.

Pension Credit tops up a pensioner’s weekly income to £227.10 if you're single. For couples, it’s £346.60.

You may be entitled to extra amounts if you have other responsibilities and costs. For those with a severe disability, a further £82.90 a week is available. You must get one of the following benefits to qualify:

• Attendance Allowance
• The middle or highest rate from the care component of Disability Living Allowance
• The daily living component of Personal Independence Payment (PIP)
• Armed Forces Independence Payment
• Daily living component of Adult Disability Payment (ADP) at the standard or enhanced rate

If you care for another adult, you could receive an extra £46.40 a week, provided you get Carer’s Allowance (or you’ve claimed Carer’s Allowance but are not being paid because you receive another benefit that pays a higher amount). If you and your partner have both claimed or are currently receiving the Carer’s Allowance, you can both receive this extra amount.

For those responsible for a child or young person, you could get a further £67.42 a week (which increases to £78.10 a week for the first child if they were born before 6 April 2017). The child or young person must normally live with you and be aged 19 or younger. If the child or young person is disabled, you may get another payment.

The final top-up helps with housing costs. An extra payment may be made to cover ground rent if your home is leasehold, or to cover service charges. The above payments are all known as "guarantee credit", and form one element of Pension Credit.

The other part of Pension Credit is savings credit, which is worth up to £17.30 a week if you’re single, or up to £19.36 if you have a partner.

Who is eligible for Pension Credit?

You must live in England, Scotland or Wales and have reached state pension age (currently 66) to be eligible for Pension Credit. When applying for guarantee credit, your income is calculated; if you have a partner, your joint income will be calculated.

The DWP defines income as your state pension and other pensions (even if they’ve been deferred), earnings from a job or self-employment, and most benefits.

However, not all benefits are counted as income. Attendance Allowance, Child Benefit, Disability Living Allowance, Personal Independence Payment, Housing Benefit, council tax reduction and the Christmas bonus are excluded.

Your savings and investments are also taken into account, which includes shares and any property you own (apart from the home you live in). If you have £10,000 or less, this will not affect your eligibility for Pension Credit.

If you have more than £10,000, every £500 over £10,000 will count as £1 income a week. So, if you have £11,000 in savings and shares, this counts as £2 income a week. If your income is below £227.10 a week then guarantee credit will top you up to that amount. If you’re claiming as a couple and your weekly income is below £346.60, it will be topped up to that level.

The criteria to claim savings credit is different. You can only access it if you reached state pension age before 6 April 2016, and you have some savings and/or a private pension. There isn’t a savings limit; however, if you have over £10,000 in savings, this will affect how much you receive. You might still get some savings credit even if you do not get the guarantee credit part of Pension Credit.

The eligibility criteria are complicated, and is likely to be one of the reasons why many pensioners don’t bother claiming.

You can use the government’s Pension Credit calculator to work out if you can claim and how much you’ll get. You’ll need to have details of your earnings, benefits, pensions, savings and investments. If you get stuck, call the helpline on 0800 99 1234 (Monday to Friday, 8am to 6pm).

How to claim Pension Credit

You can apply for Pension Credit in several ways. Options include applying online on the government website, phoning the helpline (0800 99 1234), or submitting an application by post. If you haven’t reached state pension age yet, you can still apply up to four months before this date.

You’ll need your National Insurance number when you apply, plus information about your income, savings and investments. If you have a partner, you’ll need the same details about them too.

Government figures show that the majority of people apply for Pension Credit online or over the phone.

Sarah Pennells, consumer finance specialist at Royal London, comments: "You can backdate your claim for Pension Credit by up to three months, and the sooner you claim, the sooner you could start receiving payments. Not only that, but, if you’re entitled to Pension Credit, you’ll be able to get extra help with costs such as rent and council tax, which could make a big difference."

If you apply for Pension Credit and your claim is turned down, you can ask the Pension Service to look at your claim again if you think the decision is wrong. Asking them to change their decision is called a "mandatory reconsideration". It’s free to do and you don’t need to use a solicitor.

Some of the reasons for a claim being refused include having too much income, not being a UK resident, failure to provide all requested information and not being the right age.