Pension Credit applications have rocketed by 145% since chancellor Rachel Reeves announced that the Winter Fuel Payment would be means-tested.
Pension Credit tops up a retiree's income, and can be claimed even if you have a pension or own your own home.
About 150,000 Pension Credit claims were made in the 16 weeks since the government announced at the end of July that it would be a requirement for claiming the Winter Fuel Payment. This compares to about 61,300 claims in the 16 weeks beforehand.
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There has been a big rush recently as the 21 December deadline to qualify for backdated Winter Fuel Payment – a benefit worth up to £300 - approaches. About 10,000 Pension Credit applications were received each week in November. Back in April, the weekly level was around 4,000.
But be warned that even if you meet the December deadline, there is a long wait to process claims so you probably won't get any money until after Christmas.
The average time to process a Pension Credit application rose to 52 working days in the week ending 21 October, up from 25 working days in the week ending 25 September.
The 10-week wait was recently revealed by pensions minister Emma Reynolds.
The Department for Work and Pensions (DWP) has increased staffing to help process claims quicker, but says the rise in the processing time is "a reflection of our Pension Credit campaign which has boosted applications by [a huge amount]".
There is also a risk that your claim may not be successful. Data from the DWP shows that only around half of applications are approved: since 1 April, the government has awarded 81,000 Pension Credit claims, and turned down 81,500 claims.
After Rachel Reeves axed the Winter Fuel Payment for millions of pensioners, the government said it will try and boost the take-up of Pension Credit so that the pensioners who need it most will get it. The payment is worth £300 for households with someone aged 80 or over, while households with someone aged 66-79 receive £200.
Receiving Pension Credit also unlocks access to other benefits, such as a free TV licence, help with NHS costs and the Warm Home Discount.
If you want to apply for Pension Credit and receive the Winter Fuel Payment, you'll need to be quick as the deadline is fast approaching.
We explain everything you need to know about Pension Credit, and the various ways to apply.
What is Pension Credit?
Pension Credit is one of the most misunderstood benefits. It averages £3,900 a year, but could be worth much more to certain households. It also unlocks access to other benefits, such as cold weather payments, help with NHS costs, the £150 Warm Home Discount Scheme - and from this year, the Winter Fuel Payment.
The Winter Fuel Payment was previously available to everyone of state pension age living in the UK.
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, and is available to those on low incomes. 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.
Caroline Abrahams, charity director at Age UK, comments: “Claiming Pension Credit is the main pensioner benefit that also qualifies people for a Winter Fuel Payment, so we really do urge anyone who is feeling the pinch to come forward and check if they’re eligible for extra help this winter."
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:
- Winter Fuel Payment
- 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 (only for those who get the guarantee element of Pension Credit, or are on a low income and have high energy costs)
- Christmas bonus (only for those who receive the guarantee element of Pension Credit)
- A discount on Royal Mail redirection service for those moving home
When is the deadline to apply for Pension Credit and receive the Winter Fuel Payment?
Many pensioners will be worried about losing their Winter Fuel Payment this year, given that average energy bills rose by 10% on 1 October. The energy price cap will increase by a further 1% in January.
It's worth checking if you qualify for Pension Credit, because if you are eligible, you will receive backdated Winter Fuel Payment covering this winter, plus you'll get the payment automatically in future years.
But, you will need to be quick to get the backdated benefit. The qualifying week in 2024 for Winter Fuel Payments was 16 to 22 September. This meant you had to apply by 22 September to get the payment.
However, for those applying after this deadline, the DWP can backdate your claim as long as you apply by 21 December, and assuming you met the Pension Credit entitlement conditions throughout the previous three months.
Anyone who is entitled to Pension Credit for at least one day of the qualifying week will have automatic entitlement to Winter Fuel Payment.
If you're applying online for Pension Credit, you need to make sure you submit your application by 23:59 on Saturday, 21 December. Phone applications need to be done the day before, by Friday, 20 December (the phone line closes at 6pm). Postal claims must be received by 21 December.
You do not have to do anything extra to backdate your claim. The DWP says: "If they make their application online, they will automatically be asked if they would like to backdate it. If they make their application over the phone, the adviser will talk them through this."
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 - but 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.
About two-thirds of people (65%) entitled to Pension Credit received the benefit in 2022-2023, according to the latest government data. It means up to 760,000 households that are eligible for the support aren't claiming it. The average loss was £1,900 a year, with £1.5 billion in total going unclaimed.
Even those who do 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.
Figures released in May reveal that the DWP could be paying out an extra £80 million if it had up-to-date information about claimants. Stephen Lowe, group communications director at retirement specialist Just Group, says: “Benefits like Pension Credit are a valuable financial resource for retirees on low incomes or for those who are disabled, are carers, or have dependents.
“So, to see that eligible pensioners missed out on £80 million of extra income in 2023-2024 due to submitting inaccurate information is deeply frustrating. The money is there to support the people who need it most, and although the application process can be lengthy, we strongly encourage people to persevere.”
Governments have run multiple awareness campaigns to encourage more people to claim the benefit. Reeves's shock Winter Fuel Payment announcement also drove up claims, with a 145% surge in the past few months.
However, Abrahams at Age UK points out that despite numerous campaigns to drive the take-up of Pension Credit over the years, only 65% claim it "and the figure has never gone above 66% in the last decade".
She adds: “We would encourage anyone with an older person in their lives to strike up a conversation about the cost of bills and mention this extra help that might help them to cope and stay warm this winter, if they put in a claim.”
How much is Pension Credit worth?
Pension Credit rose 8.5% in April 2024, thanks to the state pension triple lock. Pension Credit tops up a pensioner’s weekly income to £218.15 if they are single (or £11,344 a year) in the current tax year. For those with a partner, the joint weekly income is topped up to £332.95 per couple (£17,313 a year).
But you may be entitled to extra amounts if you have other responsibilities and costs. For those with a severe disability, a further £81.50 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 £45.60 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 £66.29 a week (which increases to £76.79 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 £17.01 a week if you’re single, or up to £19.04 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 £218.15 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 £332.95, 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. In September, about 92% of claims were submitted online.
Tom Selby, director of public policy at the investment platform AJ Bell, comments: "The last-ditch awareness push announced by the government is welcome but it faces a stiff challenge in overturning what has been a persistent Pension Credit claims gap over the years.
"Pensioners have until 21 December to make a Pension Credit claim in order to receive the Winter Fuel Payment. Given many of the people entitled to Pension Credit will already be in a vulnerable position ahead of the winter, it is absolutely crucial take-up is dramatically boosted so those entitled to desperately needed extra financial help receive it."
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, not claiming on time and not being the right age.
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