Struggling with bills? Put in a pension credit claim NOW

Older people struggling to pay bills are urged to apply for a pension credit before May 19 to qualify for the final £301 cost-of-living payout.

The government plans to give people on means tested benefits £900 over the next year, divided into three benefits, plus a further £150 if you have disability benefits and £300 for pensioners to help with energy bills.

As long as you apply for a retirement credit on Friday that is ultimately successful, your application can be retroactive for three months and you will get the final payment for living expenses.

> How do you apply for a pension discount? Full details below

That means that even if there is a backlog, which has caused major delays in the past, you will still be within the time limit to receive the first in the series of three payments for 2023-24.

If you are elderly and unwell, the weekly income with pension credit is topped up to a minimum of £201.05 for singles and £306.85 for couples, and it can be more if you have a disability or caring responsibilities.

It is just below the level of the full new ‘flat rate’ state pension for people retiring since 2016, which after a recent 10.1 per cent increase is worth £203.85 a week or £10,600 a year

The old basic pension is now £156.20 a week or about £8,120 a year – but that is supplemented by additional state pension entitlements, S2P and Serps, if earned during years of employment.

You don’t need to receive a state pension to qualify for a pension credit, and a rainy day fund of up to £10,000 will be disregarded if your income is low and you meet other rules.

Pension discount also gives access to a lot of extra support, such as extra help with energy bills, council tax, housing costs and free TV licenses if you are older than 75 years.

However, despite the benefits, hundreds of thousands of eligible people are not claiming.

The government says the last £301 of living expenses will be available between 26 January and 25 February 2023 for people entitled to one of seven benefits.

Eligible benefits include: Universal Credit; Pension credit; Income-based allowance for job seekers; Income-related work and support allowance; income support; Working tax credit; and child discount.

It states that these payments are tax-free, do not count toward the benefit limit, and do not affect existing benefits.

The £150 cost of living payment for people with disabilities will be paid this summer. Eligible benefits are: disability living allowance; Personal Independence Payment; Attendance allowance; Scottish disability benefits; Armed Forces Independence Payment; Constant attendance fee; and Mobility Supplement War Pension.

Meanwhile, the £300 pensioner living expenses will be paid to all households receiving Winter Fuel Payments.

Pensions Minister Laura Trott says: ‘Pension credit can make a real difference and I am committed to ensuring that this support – worth an average of £3,500 a year – reaches everyone who needs it, especially as we know how busy households in been all over the country.

‘Please check if you or your loved ones can claim this extra support, and if you do it before 19 May you will be eligible for a £301 cost of living payment – giving an extra financial boost to those who need this most.”

Jon Greer, head of pension policy at Quilter, says: ‘It is critical that low-income retirees check their eligibility for pension credit, if they haven’t already, as the application deadline approaches.

“Unfortunately, many retirees miss out on claiming retirement points for a variety of reasons, whether it’s a lack of awareness or a sense of ineligibility, so they don’t bother with it.

“But if they are missed, eligible retirees will miss out on a significant increase in their retirement income and cost of living as well.

“The importance of claiming this credit when it qualifies cannot be overemphasized, especially given the financial challenges many households across the country are currently facing.”

Alice Guy, Head of Retirements and Savings at Interactive Investor, said: “Retirement credit gives millions of low-income retirees a lifetime of income supplementation and lifts them out of poverty.

‘It is a great concern that some 850,000 pensioners are entitled to a pension discount and are currently not claiming it. They may live hand to mouth and struggle in poverty when help is available.

Two-thirds of those applying for retirement credit are women and the burden of retirement poverty is disproportionately placed on women, who have often been away from the workplace for years to care for their loved ones.

“It’s up to all of us to talk to elderly relatives and make sure they claim everything they’re entitled to.

“Many poorer retirees have spent years caring for loved ones or living with a disability and have failed to build up enough National Insurance premiums to receive a full state pension.”