Glossary · UK
What is Pension Credit?
A means-tested benefit for people over State Pension age on a low income, made up of Guarantee Credit (tops income up to a minimum level) and, for some, Savings Credit.
Full Definition
Pension Credit is a means-tested benefit for people who have reached State Pension age and have a low income, made up of two elements. Guarantee Credit tops up weekly income to a minimum guaranteed level set by the government each year, with extra amounts (premiums) available for severe disability, caring responsibilities, or certain housing costs. Savings Credit is a smaller, closed element only available to those who reached State Pension age before 6 April 2016, rewarding modest savings or a private pension on top of the Basic State Pension. Pension Credit is particularly valuable beyond its cash value because an award -- even of a few pence a week -- acts as a passport to other significant help, including full Council Tax Reduction, help with NHS costs, a free TV licence at age 75, and the means-tested Winter Fuel Payment. Take-up has historically been low relative to eligibility, so the Department for Work and Pensions actively encourages pensioners on modest incomes to check eligibility using the online Pension Credit calculator, since owning a small amount of savings or a small workplace pension does not automatically rule someone out.