Savings Credit

The second part of Pension Credit, is the Savings Credit. Savings Credit encourages people to save for their retirement and not rely on State Benefits for their income. If you are over sixty-five years of age you can claim sixty pence of Savings Credit for each pound of income you have which falls between the State Pension and the Minimum Guarantee. This means that you can have a maximum of (£119.05 - £87.30) x 0.60 = £19.05 Savings Credit a week for 2007/2008. However, the first £6,000 of your savings do not count when your entitlement to Pension Credit is calculated; similarly, the first £10,000 of your savings do not count if you are living in a care home. For every £500 of savings you have over the limit, the government assumes £1 of retirement income a week. There is no upper limit to your savings after which you are not entitled to claim Pension Credit.

If your income is too high to justify Guarantee Credit, you might be entitled to Savings Credit alone. Otherwise you could receive Savings Credit in addition to Guarantee Credit. If you believe you are eligible for Savings Credit contact the Pension Service on 0800 99 1234 for assistance. In 2015 the government intends to freeze the maximum amount of Savings Credit a person can receive: this will mean that fewer people will be eligible for this benefit.