Time Is Running Out For This Pension Boost

Millions have gone unclaimed in benefits for pensioners. Are you missing out? Here's how to get the money you deserve before it's too late.

For people on a fixed income, rampant inflation is bad news. That's why rising food, fuel and energy prices are hitting many pensioners particularly hard right now.

If you're struggling to make ends meet, help could be at hand by claiming benefits to top-up your income in retirement. This is known as Pension Credit which is made up of two elements: Guarantee Credit and Savings Credit.  

Guarantee Credit is available to anyone aged 60 and over and entitles you to an income of at least £124.05 a week if you're single and £189.35 a week for couples.  

If you're living off less than this, you should apply for extra cash from the government which will take your income up to the guaranteed minimum level. So, for example, if you're single with a weekly income of £90, you'll receive Guarantee Credit worth £34.05.

Savings Credit is available to anyone aged 65 and over who has saved for retirement. Here you may be rewarded with an extra payment of £19.71 a week if you're single and £26.13 a week if you have a partner. 

How does Pension Credit work?

You can work out how much Pension Credit you're entitled to using this online Pension Credit calculator. But here's a quick example:

Let's say...

• You are 65.
• No one else lives with you.
• You have savings of £5,000.00.
• You receive the full Basic State Pension of £90.70 a week
• You receive a private pension of £20.00 a week

In this case, you could be entitled to a Pension Credit payment of £25.05 per week, taking your total weekly income to £135.75.

Now I know this amount isn't enough to allow you to see out the end of your days on luxury cruises and buying holiday homes in the sun. But the point is, if you're entitled to extra money, you should claim everything you deserve.

At the moment, 2.7 million households receive an average of £50 a week in Pension Credit. But, around £5 billion in benefits is left unclaimed every year. The Department for Work and Pensions (DWP) reckon these common misconceptions are causing people to miss out:

Five myths about Pension Credit

You don't think you'll be eligible for Pension Credit - Don't rule yourself out. On top of the 2.7 million households which are already receiving Pension Credit, up to 1.8 million more could be entitled but haven't claimed yet.

It's difficult to claim Pension Credit - All it takes is one free phone call and you won't have endless forms to fill out. (Call 0800 99 1234 to make your claim.)

You'll get so little it's not worth claiming - Something is always better than nothing. Even if you only get a little extra each month, receiving Pension Credit could help you get money for other things, such as housing benefit, council tax benefit and winter fuel payments.

You have some savings so you won't get anything - Having some savings or another pension doesn't automatically exclude you. In fact, the first £6,000 of savings (or £10,000 for permanent care home residents) has no impact on your eligibility at all*. Around three quarters of people who get Pension Credit have saved something. In fact, you may be rewarded for trying to put money aside for your retirement with Savings Credit payments.

You own your own home so you won't get anything - Owning your own home doesn't discount you either. Almost half of pensioners who get Pension Credit own their own home.

If you're beginning to think you may be eligible to apply for Pension Credit, then there is some good news: Payments can be backdated from the day you were first entitled to the date you apply. This is up to a maximum period of 12 months.

However -- and this is the important bit -- the rules are changing for the worse next month. From 6 October 2008, the maximum period for backdating Pension Credit payments is being cut from 12 months to just three months. That means, to make the most of missed payments, The Pension Service must receive your application before this date.

Unfortunately, there's only one month left to make your claim. You better get your skates on!

*Your entitlement to Pension Credit will be reduced by £1 for every £500 in savings you have above these limits.

More: The Way Out Of Pensioner Peril | Pension Credits: What Are They And Are They Any Good? | Don't Rely On Property For Your Pension