What is the Pension Credit cost of living payment?
The money is available to successful applicants for Pension Credit who have registered by 19 May. Recipients will get the £301 cost of living payment alongside any Pension Credit payments. Anyone who applies after the deadline will risk missing out on the extra money. The payment will not count towards any benefit caps, affect existing benefits or be subject to tax.
An estimated 850,000 pensioners who are eligible for Pension Credit do not claim it. This means that low-income pensioners are not getting the additional money they are entitled to, along with other helpful discounts and payments. A huge number of people are missing out on a valuable benefit that could make a significant difference to their day-to-day lives. There are a whole host of reasons people fail to claim benefits they are entitled to, including assuming that they will not qualify or not realising that the help is available.
What are the cost of living payments for?
People on Pension Credit receive cost of living payments to help with the rising price of household essentials in the UK. The plan set out by the government is to pay people on means-tested benefits a total of £900, spread over three payments in the 2023/24 tax year. Disability benefit claimants will get a further £150, while pensioners will be sent a £300 top up for energy bills.
Successful Pension Credit applications will be backdated by three months, which will include the latest cost of living payment. This means that even if an application is not approved straight away, it will still be within the eligible timeframe for the additional 2023/24 payments. Bear in mind that you would need to have been eligible for the previous three months to get the full backdated support. Two further payments of £300 and £299 will be made later in the 2023/24 tax year.
Pensions minister Laura Trott said Pension Credit is “worth an average of £3,500 a year” and has urged the public to “check if you or your loved ones can claim for this extra support."
What is Pension Credit and who can access it?
Pension Credit is a state benefit designed to top up the weekly income of people over pension age. An individual claiming Pension Credit should have their weekly income topped up to a minimum of £201.05, or a joint £306.85 for a couple. You could be entitled to more money if you have a disability or certain caring responsibilities. The amount is based on the full New State Pension amount of £203.85 a week
Pension Credit is for people over the State Pension age, but you do not need to be claiming State Pension payments to get it. There are plenty of reasons why someone over the State Pension age is unable to claim State Pension payments, including not making enough National Insurance Contributions during their working life. However, they may still be entitled to Pension Credit if they have a low income.
Alongside the extra money, Pension Credit recipients can access other payments to help with housing costs, energy bills and cost-of-living increases. There is also support in the form of council tax discounts, discounted NHS dental treatment, cheaper optical care and reduced transport costs. Plus, over-75s claiming Pension Credit are eligible for a free TV licence.
We have more information on the value of the UK State Pension in our article ‘How much is the UK State Pension?’.
Why is it important for people to apply for Pension Credit before the deadline?
If you are eligible for Pension Credit, it makes sense to apply as soon as possible. Pension Credit is designed to lift a person's income to what the government considers a minimum standard. This means that people who are eligible for the money, but not claiming it, may be in an unnecessarily difficult financial situation. Pension Credit could make meeting bills and housing costs easier.
Registering for Pension Credit before the 19 May deadline will give successful applicants an extra £301 cost of living payment. This is in addition to any Pension Credit payments they would be eligible for.
Keep in mind that the cost of living payments are paid to people claiming Universal Credit, income-based Jobseekers Allowance, income-related Employment and Support Allowance, Income Support, Working Tax Credit and Child Tax Credit, as well as Pension Credit.
How do I find out if I can claim Pension Credit?
In order to claim Pension Credit, you will need to live in England, Scotland or Wales and be over the State Pension age (currently 66). If you have a partner, they will also need to be over the State Pension age, unless one of you is getting Housing Benefit for people over State Pension age.
In addition, your weekly income will need to be below £201.05 if you’re single, or your joint weekly income will need to be below £306.85 if you have a partner.
You can find out more about Pension Credit eligibility here.
If you are unsure whether you are eligible for State Pension payments, read our article ‘Will I get a state pension?’ for more details.