Pension credit, statements and top ups - what you need to know

pension credits

Pension Credit is, we are told, the least claimed of all benefits. So what is it? How does it work? Who is eligible? And how do you get it? Here's all you need to know about Pension credit, top up and statements.

Pension credit

This is the means-tested benefit for people who have reached state pension age. It tops up their household income to a guaranteed amount known as the "standard minimum guarantee". So, if your State Pension is below the "standard minimum guarantee" and you don't have enough additional income to put your household income above this level, you are able to claim Pension Credit to top up your weekly income.

For a single person, the standard minimum guarantee level stood at £148.35 per week, rising to £151.20 per week at the beginning of the new financial year. For couples, it stood at £226.50, rising to £230.85. Pensioners who have a disability, caring responsibilities or housing costs can claim additional amounts depending on their circumstances.

Pension Credit will continue to provide this safety net for the pensioners whose income falls below the standard minimum guarantee following the change in State Pension from 6 April 2016.

One thing that it's important to note is that individuals who have taken career breaks to raise children or for caring responsibilities are eligible for National Insurance credits to cover gaps on their National Insurance record. Those caring for adults can also benefit from specified adult childcare credits and carer’s credits. Women in their 50s are among those most likely to be providing informal care and stand to benefit here.

National Insurance credits may be available to people who are unable to work and pay contributions because they are unemployed, are incapable of working or have limited capacity to do so, or are caring for others. As with any benefit, however, there are conditions of entitlement.

Those who stay at home to bring up their children are awarded NI credits automatically if they receive Child Benefit up to their youngest child's 12th birthday. If the partner caring at home is not the Child Benefit recipient they can apply to have the credits transferred to them as long as the Child Benefit recipient does not need the credits themself.

A full list of credits currently available and the eligibility conditions can be found here.

Pension top up

Pension Top Up is a scheme that started in October 2014 (lasting for 18 months), which gave pensioners up to £25 a week on top of their State Pension in return for a lump sum; an alternative to Pensioner Bonds.

If you were a woman born before 6 April 1953 or a man born before 6 April 1951 then you could increase your State Pension by between £1 and £25 a week and get a guaranteed extra income for life with the State Pension top up scheme.

To do this you needed to make a lump sum payment between 12 October 2015 and 5 April 2017 and you could work out how much you needed to pay using the State Pension top up calculator.

Pension statements

The free Government service to help people better understand their State Pension has been newly expanded so that anyone over the age of 55 is now able to request a personalised State Pension statement. This offers an estimate of what you are likely to receive based on your current National Insurance (NI) record. Until now, the scheme has only been open to people over the age of 60.

Before people take advantage of the new freedoms, they will also be encouraged to seek free and impartial guidance on their retirement choices from the new Government service, Pension Wise. This will encourage users to obtain a pension statement, as well as providing other information through face-to-face sessions for those who want them.

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