Thousands of Brits are applying for Pension Credit this year in order to secure their Winter Fuel Payments. While some may believe they are ineligible due to exceeding the weekly income thresholds of £218.15 for singles or £332.95 for couples, it’s important to note that not all forms of income are considered when calculating this means-tested benefit.
When determining your weekly income for Pension Credit, certain sources such as state pension, workplace or private pensions, employment earnings, self-employment earnings, and most social security benefits like Carer’s Allowance and Tax Credits are taken into account. Additionally, savings or investments over £10,000 contribute towards your total income, with every £500 saved or invested over this threshold counting as £1 of income.
Individuals who have deferred their pension, whether it be state, personal, or workplace, will still have the amount they would have received if they hadn’t deferred it included in their income calculation. However, there are certain benefits that are not counted towards your total income when applying for Pension Credit, such as Adult Disability Payment, Attendance Allowance, Child Benefit, and Housing Benefit among others.
Pension Credit is divided into two parts: Guarantee Credit, which tops up your weekly income to £218.15 for single people or £332.95 for couples based on your income calculation, and Savings Credit, which is aimed at those with significant savings or multiple pension incomes. To be eligible for Savings Credit, individuals must have reached state pension age before April 6, 2016 and have some retirement savings.
Despite earning above the weekly thresholds, individuals may still qualify for Pension Credit as certain benefits are not taken into consideration when assessing eligibility. This includes benefits like Disability Living Allowance, Pension Age Disability Payment, and social fund payments like Winter Fuel Allowance and Council Tax Reduction. Savings Credit offers a lower rate compared to Guarantee Credit, with rates varying for single people and couples depending on their savings income.
In order to receive Pension Credit, it is essential to understand the full scope of what counts as income against benefits. By being aware of the various forms of income and benefits that are considered or excluded, individuals can make informed decisions when applying for Pension Credit to help support their financial well-being in retirement.