No, Pension Credit is not taxable: the law lists it as exempt from Income Tax. The State Pension is taxable, though it is paid with no tax taken off.
Many people over State Pension age get both payments, and one is taxed while the other is not. What follows covers where each rule comes from, what you do and do not have to report, what else comes with a claim, and how the Winter Fuel Payment for 2026 to 2027 is clawed back through tax.
Pension Credit questions go to the Pension Service and tax questions to HMRC, both free. When a wider look would help, list your pensions, savings and benefits as one enquiry using the form on this page. Sending it costs nothing, and a call from an FCA-authorised adviser firm follows.
What the law says, and why the State Pension is different
Section 677 of the Income Tax (Earnings and Pensions) Act 2003, in Part 10, Chapter 5, is headed "UK social security benefits wholly exempt from tax: Table B". Its first subsection reads: "No liability to income tax arises on the United Kingdom social security benefits listed in Table B." The table names "State pension credit", along with Housing Benefit.
HMRC's guidance on GOV.UK puts it in plain words. Its list of common state benefits that carry no Income Tax includes Pension Credit, Attendance Allowance, Housing Benefit and the free TV licence for over-75s. The State Pension is on the opposite list, of benefits you do pay Income Tax on.
The two are separate payments, and the State Pension counts as taxable income but reaches you with no tax deducted. Tax arises only when your total taxable income, State Pension included, is above your personal allowances. Where tax is due, HMRC will usually adjust your tax code so it comes out of wages or another pension; if the State Pension is your only income and you owe tax, HMRC writes to you. The mechanics are on is the State Pension taxable? and how your pension tax code works, and the pension itself is explained in the State Pension guide.
GOV.UK's test for whether you are a taxpayer starts by adding up all your taxable income, including taxable state benefits, then takes off your tax-free allowances; anything left makes you a taxpayer. Pension Credit never enters that first sum. Payments that follow a bereavement have rules of their own, covered on is a widow's pension taxable?
Do you have to declare Pension Credit?
To HMRC, the law above settles the tax: none is due on Pension Credit. GOV.UK's Self Assessment guidance says tax is usually deducted automatically from wages and pensions, that people with other income must report it on a return, and that you must send a return if HMRC asks you to. The guidance read for this page does not mention Pension Credit either way. If HMRC does ask you for a return, its own notes say what to enter, and whether your State Pension or a private pension goes on one is answered on declaring pensions on a tax return. One related item does have to go on a return: the Winter Fuel Payment, covered below.
To the DWP, the duty is real. GOV.UK says you must report changes to your personal and financial circumstances, and that a claim could be reduced or stopped if a change goes unreported. The list includes starting a new pension or taking a lump sum out of a pension pot.
That reporting feeds Pension Credit's own means test, which does not follow the tax rules: the State Pension and other pensions count as income there, while some tax-free benefits, such as Attendance Allowance and Housing Benefit, do not. Being taxable or not settles nothing about that test. How it works, with the savings line, is on how much Pension Credit you can get and what counts as income.
Drawing money from a pension can touch both systems at once: the withdrawal may be taxed (see tax on drawdown) and may also have to be reported to the Pension Service. A withdrawal planned alongside a claim is a case for one conversation about tax and benefits. Sketch the plan in this page's form, free of charge, and expect a phone call from an FCA-authorised adviser who can weigh both sides. Pension Wise gives free guidance on how to take a pot (what Pension Wise is).
Other help that follows a Pension Credit award
Receiving Pension Credit opens the door to other help. The summary below is GOV.UK’s position as read on 20 October 2026, and each has rules of its own.
| Help | What GOV.UK says |
|---|---|
| Housing Benefit | A new claim is possible only in certain cases, one being that you have reached State Pension age (couples have further conditions). Savings over £16,000 usually rule it out "unless you get Guarantee Credit of Pension Credit". You can apply as part of a Pension Credit claim. See the State Pension and Housing Benefit. |
| Council Tax Reduction | Your local council runs its own scheme, and household income, including savings and pensions, is part of what it looks at. A bill could be reduced by up to 100%. |
| Free TV licence | Available if you are 75 or over and get Pension Credit, or live with a partner who does. It covers everyone at your address. You can apply when you’re 74 if you already get Pension Credit, and you pay for your licence until the end of the month before your 75th birthday. |
| Cold Weather Payment | You will usually get it if you get Pension Credit, without applying. It is £25 for each 7-day period of very cold weather between 1 November 2026 and 31 March 2027. Not available in Scotland, where an annual Winter Heating Payment may apply instead. |
| NHS costs | Help with costs such as prescriptions, dental treatment, glasses and hospital travel, for people getting the Guarantee Credit part. |
Housing Benefit and the free TV licence for over-75s are both on the tax-free list in the first section.
The Winter Fuel Payment for 2026 to 2027: tax-free, with a clawback above £35,000
The Winter Fuel Payment is on GOV.UK's tax-free list, and Pension Credit ignores it as income. It is a separate payment. For winter 2026 to 2027 you can get one if you were born on or before 27 June 1960 and usually live in England, Wales or Northern Ireland, and it is between £100 and £300. Your circumstances in the week of 21 to 27 September 2026, called the qualifying week, decide the amount.
Getting Pension Credit changes how it works in four ways:
- No claim. Most people are paid automatically, and you do not need to claim if you get Pension Credit.
- Amount. If you get Pension Credit (not as part of a joint claim) it is £200 if you were born between 28 September 1946 and 27 June 1960, or £300 if you were born before 28 September 1946.
- Living with someone eligible. Your payment may be different if you get Pension Credit and share your home with another eligible person.
- Care homes. You will not be eligible if you get Pension Credit and have lived in a care home for the whole time from 29 June 2026 or earlier.
The tax connection is an income test. If your total income is over £35,000, HMRC will take the payment back; your partner's income does not count, and the figure is the total income you expect in the tax year before any deductions. HMRC will usually collect it through your tax code, or through your tax bill if you complete a Self Assessment return, and anyone who completes one must include the Winter Fuel Payment on it each year they get it. You can no longer opt out for 2026 to 2027.
Scotland differs. There is no Winter Fuel Payment there; mygov.scot says the Pension Age Winter Heating Payment replaced it, could be between £105.55 and £316.70, and is taken back by HMRC if your total income is over £35,000. Its own eligibility rules apply.
Questions people ask about Pension Credit and tax
Do you pay tax on Pension Credit and Attendance Allowance?
Neither is taxed: both sit on GOV.UK’s tax-free list. Attendance Allowance is also ignored as income when Pension Credit is worked out; how the two interact is covered in Pension Credit and disability.
Is Pension Credit a tax credit, or the same as pension tax relief?
No to both. GOV.UK describes Pension Credit as extra money to help with living costs if you are over State Pension age and on a low income. Relief on contributions into a pension is a separate subject, covered in pension tax relief.
Does a lump sum from my pension affect Pension Credit?
It can. Taking a lump sum out of a pension pot is one of the changes to report to the Pension Service, and savings over £10,000 are counted as weekly income. The tax on the lump sum is a separate matter, covered on the tax-free lump sum page.
When is the Winter Fuel Payment paid?
Most eligible people will be paid in November or December 2026, and a letter in October or November should say how much you will get.
Where to take questions about your own position
The Pension Service on 0800 99 1234 deals with Pension Credit claims, and HMRC deals with tax codes and bills. State Pension, a workplace pension and savings can all affect both. Anyone who wants the whole picture reviewed can put it all into the form on this page just once; nothing is payable for sending it, and the reply is a telephone call from an FCA-authorised adviser. Pension Wise is a free place to start if you have a defined contribution pot (what Pension Wise is).