Page last updated at 12:00 GMT, Monday, 17 August 2009 13:00 UK

Q&A: Pension Credit

An elderly couple
The pension credit boosts pensioner savings

As part of its understanding pensions series, the BBC News website provides an introduction to the Pension Credit, a means-tested benefit.

What is it?

The Pension Credit was introduced on 6 October 2003 and replaced the Minimum Income Guarantee (Mig).

The Pension Credit is designed to help pensioners on low incomes who have some savings.

It is paid to millions of households, but many pensioners in need are failing to claim.

The credit for 2009/2010 will ensure a minimum income of £130 a week for a single pensioner and £198.45 for couples.

From 6 April 2010 the age from which you can get Pension Credit will rise in line with the increase in women's state pension age from 60 to 65 by 2020.

How does it work?

The credit has two elements: The Guarantee Credit and Savings Credit.

The Guarantee Credit can be claimed by pensioners who are 60 or over, while the Savings Credit can only be claimed by pensioners who are 65 or over.

The Savings Credit has been created to reward pensioners who have a second pension or modest savings.

The credit is also very important for low-income pensioners as it is a so-called "passport benefit": those who claim the guaranteed element of the credit should also get help with council tax and housing costs.

How will I get it?

The new credit is administered through the Pension Service, the government office which has been set up to help people claim state support.

Local partnerships with organisations, such as charities, will also help people claim the credit.

The Pension Credit helpline on 0800 99 1234.

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