Pensioners urged to check Pension Credit eligibility by 18 December to unlock £324 cost of living payment

Pensioners must apply for Pension Credit by 18 December to qualify for £324 payment, and then a further £900 next year. We explain who is eligible (you may be surprised) and how to claim.

Time is running out for thousands of pensioners to claim Pension Credit and qualify for an extra cost of living payment. 

The deadline to apply for Pension Credit and receive the £324 payment is 18 December, 11:59pm. 

Pension Credit is worth £3,500 a year on average, and also gives people access to other benefits, such as cold weather payments, help with NHS costs, and extra cost of living payments from the government. 

The £324 payment is on top of the pensioner cost of living payment, worth £150 or £300, which was recently paid with the Winter Fuel Payment

Pension Credit is one of the most under-claimed and misunderstood benefits. 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. 

About 850,000 eligible pensioners are missing out on Pension Credit by failing to make a claim. 

“Pensioners have faced huge financial challenges this year and need to claim all the support they can to help them through the next few months,” says Helen Morrissey, senior pensions and retirement analyst at the investment platform Hargreaves Lansdown

“This year Pension Credit claimants have also been able to claim extra cost of living payments from the government with a £324 payment being paid recently [which claimants can still get if they apply by 18 December] and a further £900 due to be paid in instalments next year.” 

We explain what Pension Credit is, who can claim, and how much it’s worth. 

What is Pension Credit? 

Pension Credit is a payment for people over state pension age and on a low income.  

It 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. 

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
  • 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 house
  • £324 cost of living payment (if you apply by 18 December 2022), and £900 cost of living payment (to be paid in 2023)

Is there still time to claim Pension Credit and get the £324 cost of living payment? 

Yes, but you need to act quickly as applications must be made by Sunday, 18 December.  

By meeting this deadline, you’ll trigger the cost of living payment for the period 26 August to 25 September, worth £324.  

According to Tom Selby, head of retirement policy at the investment platform AJ Bell, you only need to be eligible for Pension Credit for one day during that period in order to qualify for the full payment. 

If you’re not sure if you’re eligible for Pension Credit, the best thing to do might be to apply before 18 December, so at least you’ve got your application in. If your claim is successful, you’ll receive Pension Credit plus the £324 payment (and be eligible for the £900 payment next year too – this is on top of the £300 cost of living payment that pensioner households will receive).  

If your claim is not successful, at least you know you are not eligible and aren’t one of the hundreds of thousands who are missing out on the benefit by failing to claim. Bear in mind that you can make another claim again in the future, for example if your circumstances change. 

How much is Pension Credit worth? 

Pension Credit tops up a pensioner’s weekly income to £182.60 if they are single (or £9,495 a year). For those with a partner, the joint weekly income is topped up to £278.70 per couple (£14,492 a year). This is known as the guarantee credit part of Pension Credit. 

For those with a severe disability, guarantee credit is boosted by a further £69.40 a week. 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 £38.85 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). 

For those responsible for a child or young person, you could get a further £56.35 a week. 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 within guarantee credit helps with housing costs. An extra payment may be made to cover ground rent if your home is leasehold, or service charges. 

The savings credit part of Pension Credit is worth up to £14.48 a week if you’re single, or up to £16.20 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 the benefit. 

When applying for guarantee credit, your income is calculated; if you have a partner, your joint income will be calculated. 

The Department for Work and Pensions (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, PIP, winter fuel allowance, 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 Pension Credit eligibility.  

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 £182.60 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 £278.70 it will be topped up to that level. 

The criteria to claim savings credit is different. It’s only available if you reached state pension age before 6 April 2016, and you have some savings and/or a private pension. 

You must have an income of at least £153.70 a week if you’re single or £244.12 a week if you’re claiming as a couple. 

The eligibility criteria is complicated, and is probably one of the reasons so many pensioners don’t bother claiming.  

Use the government’s pension credit calculator to work out if you can claim and how much you’ll get. If you get stuck, call the helpline on 0800 99 1234 (Monday to Friday, 8am to 6pm). 

Claiming 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.  

If you’re racing to meet the 18 December deadline, the quickest way to apply is online or by phone.   

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. 

“People don’t realise you can claim Pension Credit if you own your own home or if you have savings,” notes Morrissey. “However, the deadline to submit a successful claim and qualify for the £324 cost of living payment is looming and it is vital that as many people as possible claim; Pension Credit can make a huge difference to pensioner households.” 


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