Pensioners could boost their retirement income by £3,000 per year – act now

Therese Coffey outlines the benefits of Pension Credit scheme

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Pensioners are currently dealing with a cost of living crisis impacting various areas of their lives. Indeed, their state pension will not keep pace with inflation as a 3.1 percent increase has been confirmed. 

With these issues compounding, many are looking for additional financial support.

This could be secured by an important tax-free, means-tested benefit from the Department for Work and Pensions (DWP).

Those struggling to make ends meet could significantly benefit from Pension Credit.

It is available to people over state pension age and on a low income who live in the UK.

The benefit is made up of two parts, but whether a person gets one or both will be based on their circumstances.

The main component is Guarantee Credit which tops up a person’s weekly income to a minimum level.

In the current year, this is £177.10 for singletons, and £270.30 for couples.

Certain individuals could get extra amounts with Guarantee Credit.

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This could be if they have a severe disability, care for someone else, or are responsible for children or young people.

Britons may also be able to gain support for housing costs such as ground rent and service charges.

The second part of Pension Credit is known as Savings Credit, for those who have made provision for their retirement – for example, through a private pension.

To be eligible for this, a person must have reached state pension age before April 6, 2016.

On average, experts estimate Pension Credit to be worth £3,000 per year.

This could make a real difference to an older person’s income, so is worth investigating.

What a person will get and whether they are eligible is dependent on three key factors.

Firstly is income, as when a person makes an application, this will be calculated.

Income includes elements such as the state pension, other pension savings, certain benefits and potential salary or wages.

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Those who have not claimed their personal or workplace pension yet will still see the sum they expect to receive counted as income.

Savings and investments are also taken into account when a person applies for Pension Credit.

The Government website explains: “If you have more than £10,000, every £500 over £10,000 counts as £1 income a week. 

“For example, if you have £11,000 in savings, this counts as £2 income a week.”

Britons can apply for Pension Credit using the online service, or alternatively by phone or post. 

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