Low-income retirees have less than a week to claim pension credit and get £324 cost-of-living payment thrown in

by | Dec 14, 2022

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Written by Tom Selby, head of retirement policy at AJ Bell

As brutally cold temperatures force up heating costs for millions of households, it is more important than ever that those on low incomes get all the support they are entitled to. 

Pension credit is massively underclaimed in the UK, with the Government estimating 850,000 eligible pensioners fail to make a claim for the benefit each year. The average pension credit claim is worth over £3,500 a year, according to the DWP – a vital income boost during normal times but even more important with inflation now in double digits.

There is an extra incentive for pensioners to make a pension credit claim by 18 December this year. This is the deadline for backdated claims to be made which could also trigger a £324 cost-of-living payment. 


Pension credit claims can be backdated by up to three months, meaning 18 December is the last opportunity to trigger the cost-of-living payment for the period 26 August to 25 September. You only need to be eligible for pension credit for one day during that period in order to qualify for the full £324 payment.

While clearly the delays in processing pension credit claims currently being experienced by pensioners are far from ideal, don’t let this put you off making a claim. Even if processing is slow, this won’t change your entitlement to the £324 cost-of-living payment.

Pension credit explained


Pension credit is a key benefit provided by the state which often tends to go unclaimed by lower income retirees.

In 2022/23, if you are over state pension age (66), single and your income is less than £182.60 a week then pension credit will top you up to that amount. For a couple, the combined income figure is £287.70.

Those figures will rise to £201.05 and £306.85 a week for single people and couples respectively from April next year, due to the link with inflation. It could mean that even if you’re not eligible now, there may be a chance of getting a small state pension top up from April next year. That in turn could unlock the £900 cost-of-living payments set to be given to those on means tested benefits next year. 


In relation to pension credit, your income includes your state pension, other pensions, employment or self-employment earnings and most social security benefits. As with the state pension, it is up to you to claim pension credit.

As well as allowing you to benefit from the second £324 cost-of-living payment, pension credit also acts as a gateway to other benefits, such as help with heating costs, housing benefit, dental treatment and free TV licenses (if you are aged 75 or over).


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