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A guide to transferring your pension
May 6, 2024
July 30, 2024
Chancellor Rachel Reeves has announced that only households with someone over state pension age (66) and in receipt of pension credit will now be eligible for the Winter Fuel Payment.
In 2023-24, the payments could be claimed by those born before 25 September 1957, worth between £250 and £600 to help you pay your heating bills. This included an extra “cost of living payment”.
Now, households with someone over the age of 66 and receiving pension credit will get £200 while those over the age of 80 on pension credit will receive £300.
But what is pension credit, and how could it boost your standard of living in retirement? Here, Telegraph Money explains what you need to know.
Pension credit is a means-tested benefit for those above state pension age with a low income. It tops up their income to help with their everyday living costs, providing an average income boost of approximately £3,900 per year.
However government figures published last year showed approximately 850,000 pensioners who are eligible for pension credit were not claiming it – roughly one in three.
To qualify for pension credit, you must be above state pension age, which is currently 66. For those who are not British, you will need to have settled or pre-settled status under the EU Settlement Scheme.
Single pensioners are eligible to receive pension credit if they have a weekly income of up to £218, while those in a couple, where you are both above state pension age, must have an income of up to £332 per week.
But if you have a disability or you are a carer, you may still qualify for pension credit even if you have a higher income. To see whether you qualify, you can use the Government’s pension credit calculator.
You’ll need details of your earnings, benefits and pensions, as well as your savings and investments.
It’s also worth noting if you have savings which exceed £10,000, the amount of pension credit you are able to claim is lower.
Pension credit is made up of two elements; guarantee credit and savings credit. You can be eligible for one or both parts of the benefit.
Guarantee credit is additional income on top of the state pension you receive to a guaranteed minimum level. If you are single, guarantee credit will top up your weekly income to £218.15. If you are part of a couple the additional payment will take your joint weekly income to £332.95.
Savings credit operates slightly differently. This is extra money available if you reached state pension age before 6 April 2016, and saved some money for retirement – such as in a savings account or private pension.
The maximum you receive as a single person claiming Savings Credit is £17.01, and the maximum for a couple is £19.04.
There is also money available if you care for someone. A so-called carer addition can be worth up to £45.60 a week.
For those with a disability you could be eligible for a severe disability addition, which is worth up to £81.50 a week.
Anyone who thinks they may be eligible to claim pension credit can apply online via the government website.
The earliest you can apply is four months before you’re due to start receiving state pension payments. You can apply any time after receiving state pension payments, but note that pension credit payments can only be backdated for up to three months, so you miss out on payments you would have been eligible for at an earlier date.
Like the state pension you are not automatically enrolled into pension credit, so must make a claim in order to receive the retirement benefits.
You can also call the pension credit claim line on 0800 99 1234 and the team will fill out an application for you over the phone. A friend or family member can call for you if you are unable to use a phone.
Or you can apply by post. You need to print out and fill in a Pension Credit claim form that can be found online or you can call to request one.
This can then be sent by freepost, so doesn’t require a stamp, to: Freepost, DWP Pensions Service 3.
In order to apply you will need your National Insurance number and information on your income, savings and investments.
Receiving pension credit doesn’t just provide you with additional money to top up your finances, it’s a gateway that gives you access to a range of other grants and savings.
Recipients of pension credit will still be eligible for the Winter Fuel Payment, while those who only receive the state pension will no longer get this financial help with energy costs. Eligible pensioners will receive up to £300.
Receiving pension credit may also mean you don’t have to pay a TV licence fee, saving £169.50 this year. If you or someone in your household is over 74 and receives pension credit then you can apply for a free TV licence.
Some broadband providers also offer discounts on internet services for those receiving pension credit, but this will vary.
Both private tenants and homeowners who receive pension credit could be eligible for a grant to help replace a broken or ineffective boiler.
Energy companies operating under the Energy Company Obligation scheme are required to provide funding for eligible households for energy efficiency improvements in a bid to reduce fuel poverty.
Pensioners who receive pension credit may also be eligible for free dental care, contributions to the cost of new glasses and help with transport to hospital. And if you or your partner receive pension credit you may also be entitled to free NHS prescriptions.
If you are a pensioner receiving guaranteed credit you may get your council tax reduced or even paid in full. If you only receive savings credit you may still be able to receive a discount if you have less than £16,000 in savings.
In the winter the Government offers a Warm Home discount – help with electricity bills – to those on low incomes. If you or someone in your household receives guaranteed credit you could be eligible to get money off your electricity bills. This is in addition to the Winter Fuel Payment.
If you have reached state pension age and are struggling with your housing costs – mortgage payments or rent – you may be able to receive housing benefits to help make up the shortfall.
