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Pension Credit Savings Credit

Savings Credit can be paid either on top of Guarantee Credit or on its own. You can only claim Savings Credit if you or your partner are aged 65 or over. It's intended as a modest "reward" if you've provided yourself with a retirement income over and above the basic retirement pension.

Savings Credit is calculated by the Pension Service, which checks whether you're entitled to Guarantee Credit and then makes a further calculation based on the information that you've provided about your income and capital. You don't have to do any calculations yourself.

You may qualify for Savings Credit if your income is over the "savings threshold". The savings threshold is £115.30 a week for a single person and £183.90 a week for a couple. If your income is equal to or below these thresholds, you won't get any savings credit. This won't affect any Guarantee Credit you get.

The maximum Savings Credit you can get is £18.06 a week if you're single and £22.89 a week if you're married or living with a partner.

The income taken into account for Savings Credit is the same as for Guarantee Credit, but various types of income are now ignored. These are Working Tax Credit, contribution-based Employment and Support Allowance, Incapacity Benefit, contribution-based Jobseeker's Allowance, Severe Disablement Allowance, Maternity Allowance and maintenance payments made to you (child maintenance is always ignored).

If your income is still over the savings threshold, the Pension Service works out your entitlement to Savings Credit.

If you get Guarantee Credit, your savings credit payment is determined by how much your income exceeds the savings threshold. The payment given is 60% of the difference between the two figures, up to a maximum of £18.06 a week for a single person and £22.89 a week if you're married or living with a partner.

If you don't qualify for Guarantee Credit, you can still get Savings Credit at a reduced rate to reflect the fact that your income exceeds the minimum level the law says you need to live on. The same steps as above are taken to work out your entitlement, but the Pension Service will also calculate how much your income is above the appropriate minimum guarantee used for Guarantee Credit. Your Savings Credit award will be reduced by 40% of the difference.

Remember, all you have to do is to give the correct information when you claim. You don't have to do the calculations yourself.

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Page last reviewed: 20/05/2013

Next review due: 20/05/2015

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