What is pension credit?

In times like these, people look for pensioncraft tips to squeeze out as much as they can for when they stop working. Rachel Reeves’ pension announcements in the Budget – to honour the “triple lock” by increasing the State Pension by almost 5% from April 2026 – will come as a welcome relief to many retirees. And reflects people’s concern that their weekly income might not stretch far enough. 

Against this backdrop, it’s striking that Pension Credit – extra money to supplement retirement income – still goes quietly unclaimed by so many households. 

In 2023-24, 282,000 homes in Britain – more than there are in Manchester – appeared to be eligible for pension credit but didn’t claim it. The government estimates a total of £1.7bn is left on the table every year, working out at roughly £6,000 per household.

If you’ve reached the state pension age (currently age 66), here’s how to make sure you’re not missing out.

What is Pension Credit?

Pension credit tops up the income of retirees on lower earnings. On average, it’s worth £2,677 a year – or £85.97 per week. Payments can also be backdated by up to three months, which alone can be worth several hundred pounds.

There are two parts to pension credit. 

There’s Guarantee Credit, which ensures your weekly income reaches a minimum level. And then there’s Savings Credit, which provides an extra payment to those who reached State Pension age before April 2016 and have built up some savings for retirement. 

Beyond these two elements, pension credit unlocks a range of other help. Everything from free TV licenses to council tax reductions and cold weather payments can become available if you receive Pension Credit. These extra forms of support may apply even if you already claim universal credit, housing benefit or are on social tariffs. 

How much can you get in pension credit per week?

Across the UK, the average weekly income for pensioners is £407. Pension credit makes up an average of £85.97 of this amount per week. For many households, this can be the difference between scraping by and living with a little more breathing room.

Pension credit can also be particularly important for new retirees. There are often delays before pension income from annuities or drawdowns starts flowing, so this benefit can bridge the gap and keep income steady in the early years of retirement.

Of those most likely to be eligible, most pensioners taking advantage of this benefit reside in the North East of England, while awareness tends to be lower down South. 

How to apply for pension credit

Pension credit isn’t paid automatically, so it’s important to know the steps you need to take. 

The quickest way to check if you qualify is to use the government’s free pension credit calculator. If you’d rather talk to someone, call the pension service helpline:

• In England, Wales and Scotland: 0800 99 1234,
• And in Northern Ireland: 0808 100 6165.

One common reason people don’t apply for pension credit is because they assume their savings rule them out. But that’s not necessarily the case. In fact, savings credit specifically exists to reward those who’ve managed to put money away.

In the current 2025/26 tax year, those who have reached the State Pension age are likely to get guarantee credit if: 

• They’re single with a weekly income under £227.10.
• Or in a couple with a weekly income under £346.60. 

If this sounds like you, make a claim. You have nothing to lose, and it could release extra money for your retirement.