This blog explains whether people entitled to or receiving State pension or Pension Credit are still eligible for benefits. It explores what benefits are available and which are removed from the gamut of social security in this context. 

Can you claim benefits with state pension ? 

Yes, you can claim benefits with state pension. A person who has reached the Pensions Credit/State Pension age, is eligible for a host of benefits, specifically due to this status and generally eligible for other benefits available to adults of all ages. 

It must be remembered, however, that some benefits will also be retracted or phased out upon attaining the State Pension age and ist receipt. 

It must be noted that the age for both Pension Credit and State Pension are the same, unless you are a male citizen born before 6th December, 1953. 

What is the difference between Pension Credit and State Pension ? 

Pensions Credit is not the same as State Pension. It is an added supplement for those people who have reached State Pension age and have low income.

Pension Credit is a benefit that one receives if you or your partner reach the required age and have a low income. From 2019, onwards the claim for this benefit has a clause- both the claimant and his/her/their partner must have reached State Pension age. 

The receipt of State Pension and other benefits within the same purview are taken into consideration when calculating the amount of Pension Credit a person will receive. 

Pension Credit is an additional cost coverage, but it depends on income, savings,  pension and other benefits that a person receives.  

It can provide an income buffer for extra care requirements such as for the disabled, their carers and people suffering from chronic illness, as well as for those who wish to purchase homes. 

State Pension is divided into Basic and New State Pension. 

The Basic State Pension is available to people if they have reached the State Pension age prior to 6th April, 2016 as long as they have paid up the requisite amount of  National Insurance contributions. 

In the case of New State Pension, people who have reached the State Pension age on or after 6 April 2016, will also be eligible for the benefit if they have paid up a sufficient amount towards the National Insurance contributions. 

What benefits can be claimed with a State Pension ? 

There are specific benefits one receives, upon the entitlement and eligibility for State Pension specifically. 

The benefits that come with the attainment of State Pension age and receipt of the related welfare provisions have already been detailed above. Other than these, benefits specific to the attainment of State Pension age are available. 

If the beneficiary is at or over State Pension age, he/she/they will be eligible for the following benefits : 

Child Benefit 

This is for any parent(s) who have the responsibility of bringing up and taking care of a child. The age of the claimants does not matter. 

Carer’s Allowance 

This is given to those who are responsible for caring for disabled children or elderly people, or individuals with illnesses, mental health issues or mobility issues. 

They must invest at least 35 hours per week in the care of the concerned individual. The carer’s income and work status are not taken into consideration when providing this benefit. 

Guardian’s Allowance 

This is given to people who take care of children who are not their own i.e. in the capacity of a local guardian etc. 

Statutory Sick Pay 

This is provided to workers by their employers if they are unable to continue their work due to illness or an accident etc. 

Keep in mind that some of these retained benefits are taxable if the claimant and his/her/their partner is earning more than a specified level of income. 

Benefits that accrue to claimants of Pension who have a low income

For claimants who have State Pension and whose income or whose partner’s income is low enough to meet the criteria, they remain eligible for an extended set of benefits. 

Irrespective of the pension they receive they are still entitled to these benefits. These include the following : 

Senior Railcard 

State Pension or Pension Credit claimants of age 60 or above are eligible to claim the Senior Railcard, which entitles them to subsidized fares on national railways. 

Housing Benefit 

For those with low income this benefit helps to cover housing costs such as rent and other service charges. 

For private homes/tenancy, this benefit can be limited by the local housing benefit allowance whereas for social tenancy it can be limited in inverse proportion to the number of bedrooms in the residence. 

It is also to be remembered, that if the Housing Benefit provided exceeds the total amount of benefits a person is eligible for, then the benefits may be reduced accordingly keeping in mind the Benefit Cap that is in place. 

Council Tax Support and Discounts  

These benefits may cover some portion of the council tax payable or it may provide a discount , especially in the case of homes which have disabled members or members suffering from chronic illnesses. 

The quantum of allowances may differ across the United Kingdom. 

Warm Home Discount Scheme 

In this scheme, a 140 pounds discount is applied directly on your electricity or gas bill (if the supplier provides both, you can choose which one). This discount is given during the winter months between October to March. 

The receipt of this benefit does not jeopardize the receipt of benefits with a similar purpose e.g. the Winter Fuel Payment or the Cold Weather Payment. You will still be eligible for these as well. They are not mutually exclusive. 

If you are receiving Pension Credit and you are entitled to the Guarantee Credit component, you will be eligible for this scheme. These claimants form the ‘core group’ of beneficiaries. 

Alternatively, if the claimant has a low income then they become part of the broader group of claimants. 

Assistance with Healthcare costs

If you are a pensioner on a low income, then the National Health Service will help you out by covering some healthcare expenses such as dental care, medical travel, cost of medication etc. 

Cold Weather Payment 

This assistance is meant to cover fuel costs for seven consecutive days of extremely cold weather ( i.e. zero degrees Celsius or below) between the months of November and the end of March. It is not a taxable benefit. 

Help/Support with Mortgage Interest payments

The beneficiary is eligible to receive a loan in order to pay the interest on mortgages taken for buying, refurbishing, renovating or repairing/improving his/her/their home. 

This loan has to be repaid when the house is sold at a later stage or ownership of the property is transferred. 

This condition does not apply when the house is sold and another property is purchased in place of it within a time period of 3 months i.e. 12 weeks. Interest is also due on the loan itself and must be paid by the beneficiary. 

Working Tax Credit 

This tax credit supplements the earnings of people who have a low income, be they self-employed or working for another. Keep in mind that Working Tax Credit is considered as income when computing total eligibility for other benefits e.g. Housing Benefits.

Child Tax Credit 

People claiming State Pension can also claim this benefit which covers the costs of childcare.

One household is entitled to only a single receipt of this benefit. It can be claimed by unemployed, retired and working individuals. 

Although for working individuals the Working Tax Credit will be a better option to claim as a benefit while receiving State Pension. 

In the case of both Working and Child Tax Credits, they cannot be claimed afresh. I.e. Only if the beneficiaries had been receiving these credits prior to their attainment of State Pension age, will they be able to continue to avail of it. 

A new request made for the first time after attaining the State Pension age will not be granted.  

Along with the Basic and New State Pensions, claimants who have crossed the age of 80 years are eligible for increased Winter Fuel Payments of 150, 200 and 300 pounds wherever applicable. 

Beneficiaries of State Pension are also covered for the costs of local bus transportation. This benefit can be claimed by applying to the local council.  

Additional benefits for State Pension claimants with a low income also include the Pension Credit Scheme, which tops up the claimant’s income , in view of their limited income and earning capacity. 

The benefits that accompany the allocation of Pension Credit also form part of the bouquet of additional welfare benefits that can be accessed by people who have crossed the State Pension age and are accessing the pension fund. 

What additional benefits come with Pension Credit ? 

Along with obtaining Pension Credit, once the beneficiary and his/her/their partner reaches the Pension Credit age, they can also claim Winter Fuel Payment. 

This benefit is annual, one-time payment of either 100 or 200 pounds, which goes towards meeting the claimant’s heating costs. 

You may also claim Attendance Allowance after you have crossed 65 years of age.

This benefit is geared towards providing for extra care needs for either disabled individuals or those who require extra care due to illnesses, mental health problems, mobility issues etc. 

From 1st June, 2020 the universal eligibility for a free television license for people aged 75 and above, was partially revoked with a conditionality. 

Now, the beneficiary must not only be 75 years or above, they must also be recipients of Pension Credit to claim the TV license for free. 

What Benefits are revoked once State Pension is availed ? 

As previously mentioned, the receipt of State Pension takes certain benefits out of the purview of accessible social welfare schemes/ grants. 

Attainment of State Pension age revokes access to any contributory schemes such as : 

The Employment Support and Allowance Scheme (contributory) 

This scheme provides money for those who are out of work due to illnesses, mobility issues, or disabilities. It is also for people who cannot work to their full capacity due to the same disabilities or health limitations. 

The contributory Job-seeker’s Allowance 

This benefit provides money to people who are currently working below capacity to enable them to tide over until they find full time or part-time employment according to their capacity. This benefit is available during the period when a person is searching for work. 

The person must currently be working 16 hours or less per week , has the capacity to do more work, but is currently searching for such opportunities. 

In both these cases, the income- based ESA or Job-seekers Allowance is no longer available to people who have reached or crossed the State pension age because they fall under Universal Credit which has been stopped for this age category once they start receiving pensions. 

The State Pension benefits also preclude the receipt of a few other benefits such as : 

Disability Living Allowance 

This is a provision for children living with disabilities that impose mobility issues or learning difficulties etc. 

It also pays for certain requirements such as home installations of accessible equipment for disabled children such as ramps, bathroom equipment, walking instruments etc. and the purchase of disabled friendly vehicles. 

Personal Independence Payment (PIP)

This is the equivalent of DLA for disabled people who have crossed the age of 16 but are below State Pension age. 

Both of these i.e. DLA and PIP cannot be claimed for the first time after the beneficiary has reached or crossed State Pension age. If they were already being claimed then the benefit can continue to be claimed if the illness of disability being claimed for is the same. 

Widowed Partner Allowance 

This was given to widowers,widows and civil partners who lost their spouse/partner before April, 2017 and have a dependent child. 

Bereavement Support Payment 

This is the equivalent of the Widowed Partner Allowance for those bereaved after 2017; now it has replaced the WPA completely. 

Both the Widowed Partner Allowance and the Bereavement Support Payment are out of the scope of benefits that can be received once you attain State Pension age and claim the related money. 

For more information on what all benefits remain accessible when State Pension is claimed, what benefits are revoked and which of these are taxable please refer to – State Pension Age Changes – Turn2us

Extra Credits than can be claimed on State Pension receipt 

As previously mentioned, in the case of both Basic and New State Pensions, the eligibility depends on the beneficiary having paid up the stipulated amount of National Insurance contributions. 

Perhaps because of illness, disability, unemployment or other unforeseen expenditures , a potential beneficiary who has attained State Pension age might not have been able to reach the obligatory National Insurance contribution. 

However, in such a scenario, other credits can apply to build up the National Insurance contribution amount. 

The receipt of almost all benefits provides credit towards the National Insurance account. 

For example, claiming Universal Credit, Carer’s Allowance, Job-seeker’s Allowance,, Working Tax Credit, Statutory Sick Pay in the years before the claimant reaches State Pension age all contribute towards credits in your National Insurance Scheme. 

Full-time training periods in either government or private institutions also count as credits as does being the spouse of an officer serving Her Majesty’s forces.

For more information on which benefits can contribute credits and what the conditionalities are please refer to – Getting credits towards your State Pension | nidirect

This blog has explained what State Pension is , how it differs from Pension Credit and how to access it. It has laid down the benefits that can be claimed alongside the receipt of State Pension and the benefits that are foreclosed on its attainment.

If you have any questions , comments or suggestions, kindly contact us and leave your message. We welcome your input. 

Frequently Asked Questions  (FAQs)- . Can you claim benefits with state pension ?

Can I claim Universal  Credit alongside my State Pension ? 

No, the eligibility for Universal Credit expires once you reach State pension age and claim the concomitant benefits. If your partner is under State Pension age, they can claim Universal Credit. 

There are, however, other benefits you can claim in lieu of Universal Credit along with State Pension for which you can refer to this blog.

For more information on eligibility for benefits under State Pension please refer to – Check if you can get Universal Credit – Citizens Advice

Can I claim State Pension if I retire before the State Pension age ? 

No, you will have to wait until you attain the State Pension age before you can claim related benefits irrespective of when you cease to work. 

But you may be able to access personal or workplace pensions early if you have a terminal illness or have retired due to poor health. 

For more information please refer to – https://www.gov.uk/early-retirement-pension

Does any private pension affect my eligibility for State Pension ? 

No, any private pension that you or partner have is separate from the State Pension entitlements which only depend on the National Insurance Credits and contributions. . 

However, the other benefits could be affected if you tap into your private pension pool. 

To understand the impact of utilizing private pensions, please refer to – Will taking my pension affect my State Pension? – Help and support (thepeoplespension.co.uk)

If I am self-employed, am I still eligible for State Pension ? What about if I have never worked ? 

Yes, you are just as eligible to claim the State Pension and concurrent benefits as a regular employed individual. All you have to ensure is that you have enough qualifying years of contributions to National Insurance or the obligatory amount  of contributions.

To understand the dynamics of these conditions better you may read-  Pensions for self-employed people (moneyhelper.org.uk)

Can  I continue to work and earn an income even if I am receiving a State Pension ? 

You may definitely continue to be employed or self-employed, or run a business/earn an income any which way while receiving the State Pension. There is no upper cap on the amount you are allowed to earn. 

However, if your earnings and your State Pension amount together cross the designated Personal Allowance, then it will be taxed on a higher slab accordingly. This is because both the income and State Pension are considered taxable income. 

So the more you earn above the Personal Allowance , the more you will be taxed. But there is no limitation on what you are allowed to earn as income. 

To further understand the computation of taxes on the Personal Allowance and the relation to State Pension, please refer to – How much is the state pension & what age will I get it? (unbiased.co.uk)

References 

  1. State Pension Age Changes – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/State-Pension-age-changes/State-Pension-age-and-other-benefits#:~:text=When%20you%20reach%20State%20Pension
  2. What is Attendance Allowance? – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/Attendance-Allowance/What-is-Attendance-Allowance
  3. What is Child Benefit? – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/Child-Benefit/What-is-Child-Benefit
  4. What is Carer’s Allowance? – Turn2us. (2019). Turn2us.org.uk. https://www.turn2us.org.uk/Benefit-guides/Carer-s-Allowance/What-is-Carer-s-Allowance
  5. What is Guardian’s Allowance? – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/Guardian-s-Allowance/What-is-Guardian-s-Allowance
  6. What is Statutory Sick Pay? – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/Statutory-Sick-Pay/What-is-Statutory-Sick-Pay
  7. Housing Benefit (England, Scotland, Wales) – Turn2us. (n.d.). Www.turn2us.org.uk. https://www.turn2us.org.uk/Benefit-guides/Housing-Benefit-(England-Scotland-and-Wales)/What-is-Housing-Benefit
  8. What is Council Tax Support? – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/Council-Tax-Support/What-is-Council-Tax-Support
  9. Help with health costs. (n.d.). Https://Www.turn2us.org.uk/. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/Help-with-health-costs/What-is-Help-with-health-costs
  10. What is a Cold Weather Payment? – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/Cold-Weather-Payment/What-is-a-Cold-Weather-Payment
  11. What is Support for Mortgage Interest Loan? – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 15, 2021, from https://www.turn2us.org.uk/Benefit-guides/Support-for-Mortgage-Interest/What-is-Support-for-Mortgage-Interest
  12. What is Working Tax Credit? – Turn2us. (n.d.). Www.turn2us.org.uk. https://www.turn2us.org.uk/Benefit-guides/Working-Tax-Credit/What-is-Working-Tax-Credit
  13. What is Child Tax Credit? – Turn2us. (n.d.). Www.turn2us.org.uk. https://www.turn2us.org.uk/Benefit-guides/Child-Tax-Credit/What-is-Child-Tax-Credit
  14. Pension Credit. (n.d.). GOV.UK. https://www.gov.uk/pension-credit
  15. What is Employment and Support Allowance (ESA)? – Turn2us. (n.d.). Www.turn2us.org.uk. Retrieved October 16, 2021, from https://www.turn2us.org.uk/Benefit-guides/Employment-and-Support-Allowance/What-is-Employment-and-Support-Allowance
  16. What is Jobseeker’s Allowance (JSA)? – Turn2us. (n.d.). Www.turn2us.org.uk. https://www.turn2us.org.uk/Benefit-guides/Jobseeker-s-Allowance/What-is-Jobseeker-s-Allowance
  17. Getting credits towards your State Pension. (2015, October 30). Nidirect. https://www.nidirect.gov.uk/articles/getting-credits-towards-your-state-pension
  18. Getting credits towards your State Pension. (2015, October 30). Nidirect. https://www.nidirect.gov.uk/articles/getting-credits-towards-your-state-pension
  19. Government Digital Service. (2011, December 8). Early retirement, your pension and benefits. GOV.UK. https://www.gov.uk/early-retirement-pension
  20. Will taking my pension affect my State Pension? (n.d.). Help and Support. Retrieved October 16, 2021, from https://thepeoplespension.co.uk/help/knowledgebase/will-claiming-my-pension-affect-my-state-pension/
  21. How much is the state pension & what age will I get it? (unbiased.co.uk)

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John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.