Pension Credit and Savings: How Much Can You Have?

One of the most common reasons people give for not claiming Pension Credit is "I have a bit put by, so I won't qualify." For many of them, that is wrong. There is no upper savings limit for Pension Credit, and the first £10,000 is ignored completely. 💚

This guide explains how savings are counted, what does and does not count, and how to work out whether your savings rule you out.

1. There is no savings cap

Many benefits have a hard cut-off. Housing Benefit, for example, is normally unavailable if you have more than £16,000. Pension Credit works differently. There is no maximum amount of savings you can have and still get it.

What matters is your income. Pension Credit tops up your weekly income to:

• £238 if you are single
• £363.25 if you have a partner

Your savings are turned into an assumed weekly income and added to your other income. If the total is still below those figures, you can get the difference. If you have a disability, care for someone or have certain housing costs, you can qualify even with a higher income.

Simple action: Try the Pension Credit calculator on Gov.uk. It asks about your savings as well as your income, so have your latest statements to hand.

2. How your savings are counted

The rule is short:

• The first £10,000 of savings and investments is ignored
• For every £500 above £10,000, you are treated as having £1 a week of income

This assumed income is sometimes called "tariff income". It has nothing to do with the interest your savings actually earn.

Example: Brian is single, over State Pension age, and has £200 a week of pension income. He also has £16,000 in savings. The first £10,000 is ignored, which leaves £6,000. That is 12 lots of £500, so his savings count as £12 a week. His total counted income is £212, which is £26 below £238. He could get about £26 a week in Pension Credit, over £1,300 a year, despite his savings.

At that rate, you would need a lot in the bank before savings alone ruled you out. Another £10,000 only adds £20 a week to your counted income.

3. What counts, and what does not

Savings and investments usually include:

• Bank and building society accounts
• Cash ISAs and stocks and shares ISAs
• Premium Bonds
• Shares and other investments
• Property or land other than the home you live in

The home you live in is not counted. Some other things are ignored for a limited time, such as the money from selling your home if you plan to buy another one, usually for up to six months.

Pensions you have not yet taken are handled separately. If you are entitled to a personal or workplace pension and have not claimed it, the amount you would expect to get is counted as income, even though you are not receiving it.

💡 Tip: Do not give money away or spend it quickly to get under a limit. If the Pension Service thinks you have reduced your savings in order to qualify, it can treat you as still having the money. Reasonable spending, such as paying off debts or essential repairs, is normally fine.

4. Why the extra money matters more than it looks

Even a small amount of Pension Credit can be worth far more than the weekly payment, because it opens the door to other help. If you get Pension Credit, you:

• Get Cold Weather Payments automatically
• Can apply for a free TV licence if you are 75 or over
• May qualify for Housing Benefit if you rent, or Support for Mortgage Interest if you own your home
• May qualify for Council Tax Reduction

If you get the Guarantee Credit part, the usual £16,000 savings limit for Housing Benefit does not apply to you.

There is also a smaller part called Savings Credit, worth up to £17.96 a week if you are single or £20.10 for a couple. It is only available if you reached State Pension age before 6 April 2016 and saved something for retirement.

5. How to apply

You can apply up to 4 months before you reach State Pension age, and at any time after. A claim can be backdated by up to 3 months if you were eligible during that time.

You can apply:

• Online through Gov.uk, if you have already claimed your State Pension
• By phone on 0800 99 1234, Monday to Friday, 8am to 6pm
• By post, using the claim form from Gov.uk

You will need your National Insurance number, details of your income, savings and investments, and your bank details. If you want the claim backdated, you will also need to know what your savings were 3 months ago.

💡 Tip: A friend or family member can make the phone call for you. If you are helping a parent, sit with them for the call so you can answer the questions together.

Pension Credit is one of the most under-claimed benefits in the country, and having savings is a common reason people rule themselves out without checking. Having been careful with money should not stop you getting help you are entitled to. 💛

Start with the Pension Credit calculator, or call the claim line on 0800 99 1234. If you live in Northern Ireland, the rules are similar and you can find them on nidirect.

For the full picture, our guide to Pension Credit covers who qualifies and what it is worth, and our checklist of free benefits for over-60s in the UK runs through the rest. Pension Credit is also a gateway to help with heating, which our guide to the Warm Home Discount and Cold Weather Payments explains. If you are caring for someone, our guide to Carer's Allowance explains a benefit that can also add £48.15 a week to your Pension Credit. Browse more Una guides for plain English help with money in later life.