What is Pension Credit?
The Pension Credit is a type of income for pensioners introduced in October 2003. The basic state pension will still form the main income for pensioners but this can be topped up by the means tested Pension Credit. A single person who applies for Pension Credit must be aged at least 60 and for couples at least one of the partners must be aged at least 60 or over. The Pension Credit is administered by the Pension Service. The rules for working out the Pension Credit are complicated and depend on the level of your income and savings. The Government’s aim is that claiming Pension Credit will be easier and it will be more generous than the previous schemes for topping up pensioner’s income, such as Minimum Income Guarantee (MIG), which the Pension Credit replaces.
By the BBC’s Andrew Verity The pension credit is a new state benefit meant to appease critics of Labour’s pension policy. The private pensions industry has accused Labour of creating a big disincentive against taking out private pensions. Sales of personal pensions have dropped sharply since Labour came to power. The critics say that one reason is the Minimum Income Guarantee, the means-tested top-up aimed at the poorest pensioners. Wasted pension saving At the moment, the Basic State Pension pays 67.50 a week to single pensioners. If they have no income other than that, they can get an extra 10.95 by applying for the Minimum Income Guarantee (MIG), which tops the pension up to 78.45. But take another pensioner who’s saved enough to receive 11 a week of private pension. This person would not be entitled to the means-tested MIG, because their income would already be above the 78.45 minimum. Now to get 11 a week from a private pension, they would need to have saved more than 10,000 into
Pension Credit is an entitlement for people aged 60 or over living in Great Britain. This could mean extra money for you every week. Pension Credit guarantees everyone aged 60 and over an income of at least: • £130.00 a week if you are single • £198.45 a week if you have a partner Also, if you or your partner are 65 or over you may be rewarded for saving for your retirement, up to: • £20.40 if you are single • £27.03 a week if you have a partner If you apply for Pension Credit and are eligible, you may receive a payment backdated for up to 3 months from the day you were first entitled to the date you first applied. To apply for Pension Credit, you must be at least 60 or within four months of your 60th birthday. It does not matter if your partner is under 60. From 6 April 2010 the State Pension age for women will gradually start to increase from the current State Pension age of 60. The age from which people can get Pension Credit will increase in line with this. You can find out the age
