How does Pension Credit Savings Credit work and who qualifies?

Full answer

**What is Pension Credit Savings Credit?** Pension Credit has two elements: 1. **Guarantee Credit**: tops up income to a minimum level (£218.15/week single, £332.95/week couple in 2026/27 — confirm current figures) 2. **Savings Credit**: rewards those who made additional pension provision above the basic State Pension **Who qualifies for Savings Credit?** Only people who reached State Pension age before **6 April 2016** (i.e. born before 6 April 1951 for men, or 6 April 1953 for women) can qualify. This is because Savings Credit was designed for those who built retirement savings under the old two-tier system. Those on the new flat-rate State Pension (introduced April 2016) are not eligible. **How Savings Credit is calculated** Savings Credit pays 60p for every £1 of qualifying income above the Savings Credit starting point (£189.35/week single, estimated 2026/27), up to the maximum: - Maximum Savings Credit: ~£17.30/week (single), ~£19.36/week (couple) The award is then reduced by 40p for every £1 by which your total income exceeds the Guarantee Credit level. **Example: James, 74, qualifying** James has the old basic State Pension of £169.50/week plus a small works pension of £50/week. Total income: £219.50/week. - Guarantee Credit starting point for his age (pre-2016): check current figures - Savings Credit starting point: £189.35 (example figure) - Qualifying income above starting point: £219.50 − £189.35 = £30.15 - Savings Credit: 60% × £30.15 = £18.09 (capped at maximum ~£17.30) - He also receives Guarantee Credit to top up to minimum level **Claiming** Pension Credit (including Savings Credit) is claimed via the Pension Credit claim line (0800 99 1234) or online. It is estimated that one million eligible pensioners do not claim — worth checking eligibility even with modest savings.

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