Thousands on benefits warned to look out for letters on doormats within weeks – and you could be £3.5K a year better off
THOUSANDS on benefits are being warned to look out for letters on their doormats - and they could be £3,500 better off.
The Department for Work and Pensions (DWP) will be writing to thousands of households this summer inviting them to claim Pension Credit.
The benefit is designed to help people over state pension age (currently 66) and struggling to get by on a low income.
The average Pension Credit award is worth over £3,500 a year and tops up a person's income to a minimum of £201.05 per week for single pensioners and to £306.85 for couples.
Latest government figures suggest that around 850,000 eligible pensioners are missing out on the cash boost.
In a bid to increase uptake the DWP rolling out its “Invitation to Claim” initiative.
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It will see potentially eligible households who receive Housing Benefit across 10 local authorities sent letters encouraging them to apply for for the payment.
Minister for Pensions Laura Trott MBE said: “We recognise the challenges some pensioners will be facing with the cost of living which is why, alongside driving down inflation, promoting Pension Credit is a priority.
“Speak to your older loved ones about Pension Credit and get them to check if they could be eligible for this vital extra support, worth an average of £3,500 per year.”
Even a small award can unlock further support – such as help with housing costs, council tax and heating bills.
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And for those over 75, this includes a free TV licence.
Also, if you're claiming Pension Credit you are also eligible for the second instalment of the £900 cost of living payment.
Consumer champion Martin Lewis said that it is a "tragedy" that so many are missing out on the cash top-up despite contributing to the state pension system for years.
He said: “Any single pensioner earning under roughly £220 a week, or pension couple earning under £320 should check online or call the Pension Credit helpline just in case you may be due.”
The 10 following local areas have been selected to take part in the new DWP scheme and eligible households can expect letters inviting them to apply for the benefit later this summer:
- Eastbourne
- Teignbridge
- Pendle
- Charnwood
- Vale of White Horse
- Redcar and Cleveland
- Craven
- Harrow
- Powys
- West Lothian
You can claim the benefit online or by calling the pension credit claim line on 0800 99 1234.
Before you make a claim it's important to have all your details on hand.
You'll need your National Insurance number, bank account details and information about your income, savings and investments.
Below we explain who is eligible for pension credit, how much you'll get, how to apply and how you'll be paid.
Who is eligible for pension credit?
It is available for people who are over the state pension age, and who live in England, or Wales.
This is currently rising to 66 for both men and women.
It used to be the case that couples, where one person was over state pension age, could claim, but new rules now mean that both people in a couple must be over retirement age to apply.
This means if you're single and move in with a partner who is younger than the State Pension age, you will stop being eligible.
But if you're already receiving Pension Credit under the old system it won't stop unless your circumstances change.
To qualify, you'll need to have a weekly income of less than £201.05 for single people or £306.85 for couples.
Your income is worked out taking into account various elements including:
- Your state pension
- Any other pensions you have saved, for instance, workplace or private pension savings
- Most social security benefits, for example, carer’s allowance
- Any savings or investments worth over £10,000
- Earnings from a job
The calculation does not include:
- Attendance allowance
- Christmas bonus
- Disability living allowance
- Personal independence payment
- Housing benefit
- Council tax reduction
If your income is too high to get Pension Credit, you may still get some savings so it's worth checking.
How much can you get in pension credit?
There are two parts to the benefit and pensioners can be eligible for one or both parts - here are the current rates for the tax year:
- Guarantee credit - tops up your weekly income to a guaranteed minimum level. This is £201.05 a week if you're single and £306.85 a week for married couples.
- Savings credit - provides extra money if you've saved money towards retirement. You can get an extra £15.94 a week for a single person or £17.84 a week for a married couple.
You may also get additional pension credit if you are disabled, have caring responsibilities or have to pay certain housing costs such as mortgage interest payments.
For instance, you can get either £61.88 a week or £72.31 per week for each child or young person you’re responsible for.
If you are disabled or care for someone who is disabled, you may get more.
For example, if you have a severe disability you could get an extra £76.40 a week or if you care for another adult you could get an extra £42.75 a week.
How do I apply?
You can start your application up to four months before you reach state pension age.
Applications for Pension Credit can be made on the government website or by ringing the claim line on 0800 99 1234.
You can get a friend or family member to ring for you, but you'll need to be with them when they do.
You’ll need the following information about you and your partner if you have one:
- National Insurance number
- Information about any income, savings and investments you have
- Information about your income, savings and investments on the date you want to backdate your application to (usually 3 months ago or the date you reached state pension age)
If you claim after you reach pension age, you can backdate your claim for up to three months.
How will I be paid?
Your benefits are usually paid into an account, for instance, a bank account.
They're usually paid every four weeks.
You’ll be asked for your bank, building society or credit union account details when you claim.
But if you have problems opening or managing an account, you might be able to claim a different way.
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Meanwhile, a woman was living on just £320 a month and in danger of having her home repossessed before she found she could claim £10,000 in Pension Credit.
here's a full list of freebies available to pensioners, including those on pension credit.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]