What extra help does Pension Credit unlock?

Will Pension Credit affect Housing Benefit? It usually helps: the Guarantee Credit part opens the way to maximum help with rent and Council Tax.

The Savings Credit part works differently, and what you actually receive turns on your rent, your council and your household. This page sets out how the links work in England, Scotland and Wales. For your own position, the Pension Service and your council answer free. Where the rent or Council Tax question touches your pension or savings as well, an FCA-authorised adviser takes it up for free, and Pension Credit households are welcome on the form on this page.

Will Pension Credit affect Housing Benefit?

Pension Credit does not cut Housing Benefit; the Guarantee Credit makes Housing Benefit easier to get. The pension-age Housing Benefit regulations say that if you, or your partner, receive a guarantee credit, "the whole of his capital and income shall be disregarded". Your income is then not tested, and you qualify for maximum Housing Benefit, which the regulations set at "100 per cent. of his eligible rent", less any deductions for non-dependants such as an adult son or daughter living with you.

Two limits apply. First, eligible rent is the rent figure the council works from, so ask it how yours has been set. Second, Housing Benefit has a savings cut-off of £16,000, but GOV.UK lists it as applying "unless you get Guarantee Credit of Pension Credit", so Guarantee Credit lifts the cut-off too.

Housing Benefit is paid by your council, not by the DWP, so Pension Credit itself does not pay your rent.

Does Pension Credit affect Council Tax?

Pension Credit does not stop you owing Council Tax, but the Guarantee Credit can cut the Council Tax itself to nothing. Council Tax Reduction, sometimes called Council Tax Support, is run by your local council. GOV.UK says your bill could be reduced by up to 100%, and that each council runs its own scheme.

In England, the national pensioner rules likewise disregard all your capital and income when you or your partner receive a guarantee credit. The maximum reduction is "100 per cent" of the daily Council Tax, less any deductions for non-dependants. In Scotland the Council Tax Reduction (State Pension Credit) Regulations 2012 say the same about capital and income, and Wales has a matching paragraph in its default scheme regulations. So across Great Britain, receiving the Guarantee Credit is the most direct route to a full reduction, although a deduction for other adults in the home can still leave something to pay.

Northern Ireland has a different scheme, so this page covers England, Scotland and Wales. If you have been told you have to pay Council Tax in full while on Pension Credit, ask the council whether the Guarantee Credit award has been passed to it, and see why Pension Credit changed or stopped if the award itself has altered.

What if you only get Savings Credit?

Savings Credit on its own does not give an automatic passport to maximum help. The rules for all three nations say that where the award of state pension credit comprises only the savings credit, the council uses the income and capital figures the DWP worked out for the award. The English regulations put it as the authority "must use the calculation or estimate" made by the Secretary of State, adjusting it only for certain items.

In practice, the council still runs its own means test using the DWP's figures, so you may get a full reduction, a partial one or none, depending on your income, your rent or Council Tax and who lives with you. Who can still get Savings Credit is covered on how much Pension Credit you can get, and the council can tell you which figures it holds for you. Where a private pension is what leaves you with Savings Credit alone, an FCA-authorised adviser will explain, without charge, how taking it sits alongside means-tested help. Pension Credit claimants can book that conversation, by phone, via the form on this page.

How do you claim Housing Benefit and Council Tax Reduction with Pension Credit?

You can claim Housing Benefit as part of the same call or application. GOV.UK says you can claim "as part of a Pension Credit claim, if you’re eligible for this", and "The Pension Service will send details of your claim for Housing Benefit to your council." The claim line is 0800 99 1234, Monday to Friday, 8am to 6pm. Step-by-step help, including what to have ready, is on how to apply for Pension Credit.

Council Tax Reduction is applied for through your council, and GOV.UK says you apply to "your local council". Check with the council once the award letter arrives.

On backdating, Pension Credit can be backdated by up to three months: GOV.UK says "your application can only be backdated by 3 months" once you are past State Pension age. For Housing Benefit, GOV.UK says "You might also be able to get your claim backdated", and says to ask the council. How far back a Council Tax Reduction can go is a question for your council.

Does Pension Credit help if you own your home?

Owners get different help, because Housing Benefit is for rent. GOV.UK lists owners with a mortgage as people who will not usually get Housing Benefit, adding "you may be able to get Support for Mortgage Interest (SMI)". Pension Credit does have an extra amount for housing costs, but it is for costs the Housing Benefit scheme does not meet: the DWP's guide gives examples such as ground rent on a leasehold and some service charges, and says it "does not cover Council Tax liabilities".

Support for Mortgage Interest is separate from that extra amount, and it is a loan, not a gift. To get it you must have a mortgage or home improvement loan on the home you live in and receive a qualifying benefit, which includes Pension Credit. GOV.UK says it is paid "as a loan, which you’ll need to repay with interest when you sell or transfer ownership of your home". With Pension Credit it usually helps with interest on up to £100,000 (£200,000 if you were already getting SMI and moved to Pension Credit within 12 weeks), and payments can start from the date your Pension Credit starts, paid every four weeks. It does not cover missed payments (arrears) or insurance.

Because SMI is a loan that builds up against the property, it matters for any later decision about the home, including how equity release and benefits interact. Citizens Advice, MoneyHelper and Shelter give free information on housing support.

Who can still make a new Housing Benefit claim?

Housing Benefit is being replaced by Universal Credit, but people over State Pension age can still make new claims. GOV.UK says new claims are open if "you and your partner have both reached State Pension age", or if you are single and past that age. For mixed-age couples, a new claim is possible only if one of you started claiming Pension Credit as a couple before 15 May 2019, or you live in supported, sheltered or temporary housing. A claim already running before that date, after you reached State Pension age, is not affected, but once it stops it cannot restart unless you meet the new-claim rules. Otherwise GOV.UK says you will not usually get Housing Benefit if "you’ve reached State Pension age but your live-in partner has not", and points you to Universal Credit instead.

Whether such a couple can get Pension Credit at all is covered on who gets Pension Credit.

Questions people ask about Pension Credit and housing help

Do you pay Council Tax on Pension Credit?

You still owe Council Tax unless you are exempt or get a reduction. Guarantee Credit usually leads to a full Council Tax Reduction, though a deduction for other adults in your home can leave a balance, and Savings Credit alone is judged by the council.

Does Pension Credit pay rent?

No. Rent help is Housing Benefit, paid by the council. Pension Credit's housing costs amount is for items such as ground rent and service charges.

Can savings over £16,000 stop Housing Benefit?

The £16,000 cut-off does not apply if you get Guarantee Credit. Without it, savings over £16,000 usually rule Housing Benefit out. How savings count for Pension Credit itself is on the Pension Credit income limit page.

The State Pension underneath all of this is explained in the UK State Pension guide. Rent or a mortgage, savings and benefits are easier to weigh out loud, so request a call through the form here, which an FCA-authorised adviser answers at no cost.