Margaret, 78, from Leeds, lives alone and receives a basic State Pension of £169.50 per week. She struggles to afford heating in the winter and has very little savings. Thanks to the updated Guarantee Credit in 2025, her weekly income will now be topped up to £227.10, a difference of £57.60 per week or £2,995.20 a year.
Because she qualifies for Pension Credit, she also gets a free TV licence, help with Council Tax, and Cold Weather Payments. Pension Credit is a means-tested benefit for people over the State Pension age who are on a low income. It ensures a minimum guaranteed income during retirement and consists of two parts:
1.
Guarantee Credit:
– Tops up weekly income to a minimum level. – From April 2025:
– Single individuals: Income will be topped up to £227.10 per week. – Couples: Income will be topped up to £346.60 per week.
2. Savings Credit:
– For those with modest savings or small private pensions. – Eligibility: Must have reached State Pension age before April 6, 2016.
The increase aligns benefits with inflation, specifically the Consumer Prices Index (CPI). In September 2024, the CPI inflation rate was 4.1%, which is now being applied to Pension Credit payments for the 2025–2026 financial year.
Increasing pension credit benefits
This is crucial as older citizens face rising utility bills, food costs, and other living expenses. To apply for Pension Credit:
1. Check Eligibility:
– Use the GOV.UK Calculator to see if you qualify based on income and savings.
2. Gather Information:
– National Insurance number
– Bank account details
– Information about income, pensions, and savings
– Housing costs and Council Tax info
3. Apply:
– Visit GOV.UK or call 0800 99 1234 to request and complete the application form (PC1).
4. Track Your Application:
– You’ll receive a letter or call within 4–6 weeks with a decision. If approved, payments are usually backdated to the date of your claim.
Other benefits for Pension Credit recipients include a free TV Licence for those over 75, Cold Weather Payments, free NHS services, Housing Benefit, and Council Tax Reduction. Caroline Abrahams, Charity Director at Age UK, said: “Too many pensioners are struggling unnecessarily when Pension Credit could make all the difference. We urge everyone to check if they or someone they know might be eligible.”
Paul Maynard, Minister for Pensions, emphasized: “Our priority is to protect pensioners and ensure they have the support they need.
This increase reflects our commitment to aligning support with real-world pressures.”
Currently, 1.4 million people claim Pension Credit in the UK, but 850,000 eligible households are still not claiming it. The average Pension Credit award is worth over £3,900 a year, and claiming opens the door to over £7,000 in additional financial support annually.
Image Credits: Photo by Tracy Adams on Unsplash
