The Department for Work and Pensions (DWP) has confirmed an increased rate of Pension Credit effective from April this year. Eligible pensioners now receive a weekly top-up of £238 if single and £363.35 if they have a partner. This tax-free, income-related benefit is linked to the State Pension age, which is set to rise from 66 to 67 between April 2026 and April 2028.
Components of Pension Credit
Pension Credit consists of two parts: Guarantee Credit and Savings Credit. Guarantee Credit provides financial help to individuals who have reached the qualifying age and whose income falls below a certain threshold, known as the 'appropriate amount'. The amount of Guarantee Credit a person receives is the difference between their current income and this appropriate minimum guarantee.
Savings Credit is an additional amount for those who reached State Pension age before 6 April 2016 and have made retirement provisions, such as savings or a second pension, that bring their income above the Savings Credit starting point. Customers can receive Savings Credit with or without Guarantee Credit, even if their income exceeds their appropriate amount.
Changes to Savings Credit Eligibility
Under the Pensions Act 2014, Savings Credit is closed to individuals who reach State Pension age on or after 6 April 2016. Those who reached State Pension age before the new State Pension was introduced on that date continue to have access to Savings Credit under the previous rules. However, if a member of a couple reaches the qualifying age on or after 6 April 2016, they will not qualify for Savings Credit unless they were awarded it before that date and have remained continuously entitled.
Qualifying Age Adjustments
The Pension Credit qualifying age is currently 66, aligned with the State Pension age. It will increase to 67 between April 2026 and March 2028, and any future changes to the State Pension age will similarly affect the Pension Credit qualifying age. Single claimants are eligible if they have reached the qualifying age, while couples must both have reached it. From 15 May 2019, if only one partner meets the age requirement, they are not eligible for Pension Credit unless they were entitled to Pension Credit or Pension Age Housing Benefit before that date and have remained continuously entitled as a couple.
