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Pension Credit: Am I entitled?
Tuesday 20th July 2010Feature by Colin Trend, of Money Advice South West
Pension Credit is a benefit that works alongside the State Pension (for females) and is supposed to guarantee a minimum level of income in old age.
For males the situation is more complicated as they have to presently wait until they are 65 before receiving their state pension. However, Pension Credit should be claimed in line with females.
Until April 2010 the age for females was 60, but it is slowly increasing over a ten year period to be brought in line with males. Some female readers may have been expecting to retire at 60 and found that it is now 61 or 62 and so many months depending on your age.
The Pension Service has been writing to people who are affected to help them claim at the right time. That’s equal opportunities for you!
To understand entitlement there is a certain amount of jargon busting that needs to take place. For example, there are capital limits that start to affect the amount that can be claimed from £10,000.
This simply means that a list of assets needs to be totalled to see potentially how much money you have stored away. It could include obvious things like money in a bank account, but it will also include shares, unit trusts, land and property. The house you live in will not count, nor the vehicle you already own. Hence there are some exemptions and if you are not sure you should seek advice about any assets.
It is also classified as a means tested benefit. This simply means that the Government want to know what income you have coming in regularly so that they can see what you already have. The Government will only make sure that the household’s income reaches a certain minimum, so if there is a private pension or an annuity, this will count towards the total.
Pretty much what you have will be split between either capital or income. It must count somewhere but never as both.
The basic minimums available to households that are 60 plus (bearing in mind this age is increasing as described above) are:
Single occupant (male or female) £132.60 per week
Couple £202.40 per week
These figures often surprise people as they are much higher than figures available on similar benefits to people under 60.
Hence if someone lives on their own and only receives the state pension of £97.65 per week at present, they are missing out on the difference of £132.60 - £97.65 = £34.95 per week. This is a massive amount to literally throw away and backdates (the time that you can claim back into the past) will only pay for three months. Hence every day that you delay it could cost more money.
Pension Credit can be claimed by ringing the free phone number on 0800 99 1234. Further information is available on the government's site here.
The above describes only part of the Pension Credit, albeit the most important part. It is often referred to as the Guarantee credit (of Pension Credit).
There is a further part to Pension Credit which is called the Savings Credit. This is only relevant once you reach 65. It actually increases the amount paid from Pension Credit where older people have modest savings, but more than the £10,000 described above or a small pension coming in. Hence if you have some savings or a little income apart from the Government, you may find that the Pension credit is increased further.
The important point is to check. This can be by ringing the above number or visiting a local advice centre that will give you Welfare Benefits advice.
An advice agency can be found by ringing 0845 345 4 345 or by visiting http://www.communitylegaladvice.org.uk/en/directory/directorysearch.jsp
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