FAQs About Later Life Planning – What is Pension Credit?
In the fourth mini blog in the series of FAQs About Later Life Planning, Gemma Norris explains what Pension Credit is and who is eligible.
The BBC recently announced plans to withdraw free TV licences for the over 75’s, with effect from 1st June 2020. Under the new rules, from 1st June 2020 if aged 75 or over you will only be entitled to a free TV licence if you are in receipt of Pension Credit.
What is Pension Credit and who is eligible?
Pension Credit is a tax-free means tested benefit. You could be eligible if you or your partner (defined as having a partner who lives with you, a [“couple”]) are over State Retirement age.
From 15 May 2019 there are important changes to note for couples eligibility. If you are in a couple you will only be eligible if both you and your partner are over State Retirement age, or if one of you is in receipt of Housing Benefit.
Eligibility to Pension Credit is dependent upon your level of income and how much you have saved or invested. If you are a couple, it is dependent upon your combined income and savings. Assessable income includes pensions (including state pension), most social security benefits and earnings. Savings above £10,000 are assessable, whereby you are deemed to receive £1 of “income” for every £500 (or part £500) over £10,000. Savings below £10,000 are disregarded. If your savings or income increases you must declare this.
Pension credit has two elements:
• Guarantee Credit tops up your income to a guaranteed minimum level of £167.25 per week if you’re single or £255.25 per week if you’re a couple.
• Savings Credit is a reward for those with a modest income who have saved for retirement. Savings credit is only available if you reached State Pension age before 6 April 2016. You could receive up to £13.73 extra per week if you are single or up to £15.35 extra per week for a couple.
If you receive Pension Credit you can also apply for;
• Council Tax Reduction
• Free NHS dental treatment
• Cold Weather Payment
• Housing Benefit
• Warm Home Discount
• NHS voucher towards the cost of glasses/contact lenses
Contact our Later Life Support team if you or your loved ones are of State Retirement age and would like more information about the benefits you may be entitled to following retirement.