- Pension Credit applications have rocketed by 145% since chancellor Rachel Reeves announced the Winter Fuel Payment will be means-tested (Pension Credit applications and awards: November 2024 - GOV.UK)
- Around 150,000 Pension Credit claims have been made in the 16 weeks since the announcement, compared to around 61,300 claims in the 16 weeks before the announcement
- Retirees need to make a Pension Credit application by 21 December to qualify for the Winter Fuel Payment – a benefit worth up to £300
- Pension Credit has historically been chronically underclaimed, with over a third of those eligible failing to fill out the relevant forms each year*
- Up to 880,000 households could be missing out on over £3,900 a year in Pension Credit payments, according to the government (Pension Credit: What you need to know - GOV.UK)
Tom Selby, director of public policy at AJ Bell, comments:
“Rachel Reeves decision to means-test the Winter Fuel Payment has caused fury among retirees and campaigners with the benefit, worth up to £300, now only available to low-income pensioners who qualify for Pension Credit top-ups.
“Pension Credit has historically been chronically underclaimed, with over a third of households who could be eligible failing to make a claim each year. This could be for a number of reasons, from a lack of awareness to difficulties filling out forms or a reluctance to be seen as a benefit claimant, but the result is hundreds of thousands of people missing out on a vital source of income worth thousands of pounds a year on average.
“The decision to means-test the Winter Fuel Payment means it’s even more important those who could qualify for Pension Credit make a claim. The fact these latest figures show a significant surge in applications suggests the attention given to the announcement has spurred people into action and retirees still have until 21 December to make a Pension Credit application.
“While this process can feel intimidating, it is worth doing if you think you might qualify. The DWP offers a useful online tool to check if you might qualify for Pension Credit before going through the application service, and organisations like Citizens Advice and Age UK can also help guide you through the process.”
Pension credit explained
Pension Credit is a key benefit provided by the state which often tends to go unclaimed by lower income retirees.
In 2024/25, if you are over state pension age (66), single and your income is less than £218.15 a week then pension credit will top you up to that amount. For a couple, the combined income figure is £332.95.
In relation to Pension Credit, your income includes your state pension, other pensions, employment or self-employment earnings and most social security benefits. As with the state pension, it is up to you to claim Pension Credit.
For those who are entitled to receive it, claiming Pension Credit is also really important because it acts as a gateway to other benefits, such as help with heating costs, housing benefit, dental treatment and free TV licenses (if you are aged 75 or over). The decision to end universal Winter Fuel Payments means it also becomes a gateway to the means-tested Winter Fuel Payment.
*Source: Income-related benefits: estimates of take-up: financial year ending 2023 - GOV.UK
