Income, benefits and Pension Credit :Cross Stitch – Pensions and retirement planning
Your income may affect how much Pension Credit you can get. Find out more about how your income may affect Pension Credit, how Pension Credit is paid and how it might affect your other benefits.
The amount of Pension Credit you get depends on how much income you have each week and how much you have saved or invested.
The following types of income are taken into account when calculating your Pension Credit:
- State Pension (including basic State Pension and additional State Pension)
- occupational and private pensions
- most social security benefits like Carer’s Allowance
- £1 a week for every £500 (or part of £500) of ‘capital’ you have over £10,000 – capital includes savings and investments, and property that’s not your main home
- earnings after tax and expenses from employment or self-employment, less half of any company or personal pension contribution you make
If you have a partner you and your partner’s income and capital will be added together when calculating your Pension Credit.
The term ‘partner’ refers to your husband, wife or civil partner. Or the person you live with as if they were your husband, wife or civil partner.
If you’re a self-assessment tax payer
If you’re a self-assessment taxpayer who claims Pension Credit – you must tell The Pension Service how much Income Tax you expect to pay for the current tax year. This will help make sure you are getting the right amount of Pension Credit and may mean you get more. This is because Pension Credit takes account of your net income after tax, including any tax on your State Pension (State Pension is taxable).
You can find out more about Income Tax by contacting HMRC.
You may still get Pension Credit if you are living with your family. The Pension Service look only at your income and not at theirs. Also you may still get Pension Credit if you own your own home – the home you live in does not count towards your ‘capital’.
All benefits, pensions and allowances are paid into the account of your choice, for example your bank account. This is the safest, most convenient and efficient method of payment.
If your circumstances change, for example your capital goes up or down, you should contact The Pension Service. They will be able to look at your claim again to make sure you are getting the right amount of Pension Credit.
If you are getting Pension Credit you may be able to get additional benefits/help such as:
- Housing Benefit
- Council Tax Benefit
- Cold Weather Payment
- Funeral Payments
- Community Care Grant
- Budgeting Loans
- Crisis Loans
- Winter Fuel Payments
- Sure Start Maternity Grant
- free school meals
The Pension Service can now help you apply for Pension Credit, Council Tax Benefit and Housing Benefit at the same time over the phone.