There is financial assistance to supplement a state pension for those with limited means. You may think of it as a pension credit.

The amount of pension credit you receive depends on your income level and is, therefore, a means-tested benefit. There are two components to this: guaranteed credit and savings credit. The two possibilities are open to you.

About a third of those qualified for pension credit do not apply for it, even though it is worth more than £3,300 annually. Who can receive pension credit, and how are both covered in this book?

How Does Pension Credit Work?

Those with modest salaries over the State Pension age are eligible for Pension Credit. It's split in two:

• Guarantee Credit
• Savings credit

For the Savings Credit portion of the Pension Credit, eligibility is limited to those who attained State Pension age before April 6, 2016.

To get the Guarantee Credit portion of the Pension Credit, you must reach the State Pension age on or after April 6, 2016. Pension Credit is still worth applying for, even if you're only eligible for a modest amount. This might increase your income and make you eligible for more benefits and amount of savings allowed for pension credit.

What Is The Value of My Pension Credit?

The following figures pertain to the fiscal year of 2022-23.

Credit Assurance

With Guarantee Credit, you can receive an additional £182.60 per week if you're a single adult or £278.70 per week if you're married or in a civil partnership.

Credit for Savings

If you have saved for retirement or receive a pension in addition to the standard State Pension, you may be eligible for additional funds under the Savings Credit program. To what extent can you count on an increase in income thanks to the Savings Credit?

• £14.48 a week for a single individual, and
• £16.20 for married, civil, or cohabiting couples

If you reach the State Pension age after April 6, 2016, you will no longer be eligible for Savings Credit.

How Pension Pots May Affect Your Claim

When calculating your income once you or your spouse reaches the State Pension age, the total of all withdrawals from all pension plans and the value of all funds remaining in the pension plan held by the individual above the State Pension age will be combined.

Suppose you're applying for Pension Credit at the age of 67. You have a pension fund of £40,000, of which you have withdrawn £10,000. You still have £30,000 in your pot. Since you are beyond the age of State Pension eligibility, both sums will be considered in determining your benefit eligibility and pension credit savings calculator.

Choosing To Ignore Your Kettle Completely

The Department of Work and Pensions, the Internal Revenue Service, or the local government would determine the amount of a guaranteed income for life if the deceased left a pension fund. This figure will be used to determine your eligibility based on your income.

Variable Pension Payments

They will calculate how much of a guaranteed income for life you would receive if you kept the money in your pension pot and withdrew it regularly or whenever you wanted to. They will also consider the amount of your discretionary income.

For purposes of calculating your benefits, a greater amount will be applied. If you or your spouse withdraw money from your pension, you must notify the DWP, HMRC, or local government.

The Department for Work and Pensions or your local council may reassess your eligibility if you intentionally spend or give away money from your pension fund to get or raise benefits. Your pension withdrawals and other assets may also go into the calculation of your benefits eligibility and pension credit savings limit.

New Claims For Married People Eligible

One of the following conditions must be met before a married couple can submit a new claim for Pension Credit:

• You and your spouse are both eligible for the State Pension
• Or one of you is claiming Housing Benefits for both because you've attained State Pension age.

Pension Credit: When And How To Apply

Pension Credit applications can be submitted up to four months before the applicant's State Pension eligibility date or the applicant's desired State Pension start date. They'll take care of the application process by completing it in your stead. You'll need to disclose specific data to apply for Pension Credit. In this regard, we may name the following:

• Information about your financial institution
• Your National Insurance Number
• Proof of income and savings or investments.

State pension claims can be submitted any time after the applicant reaches State Pension eligibility but will only be retroactive for a maximum of three months. If you are eligible for Pension Credit, you may get up to three months' benefits in your initial payment.