Pension credit claims drop as dust settles after winter fuel payment U-turn

Rachel Vahey, head of public policy at AJ Bell, highlights that Pension Credit claims have fallen 36% year on year as the spike linked to winter fuel payment changes unwinds, with a higher proportion of applications now approved and the DWP reducing its backlog, although nearly 100,000 claims were not awarded over the period.

Rachel Vahey, head of public policy at AJ Bell, comments:

“The panic caused by the announcement of the withdrawal of the winter fuel payment in July 2024 is still written large in the pension credit statistics for all to see. But it now looks like normal service has resumed, with claims falling back to pre-July 2024 levels. 

“A bigger proportion of claims are also now being awarded, indicating that more pensioners who think they have a sure-fire case are submitting claims, unlike the surge of ‘last chance’ claims seen in Autumn 2024.

“Almost 100,000 claims were still not awarded in the year to 22 February 2026, meaning a large number of those submitting claims may be unaware they don’t qualify. This is despite government efforts to raise awareness of pension credit and how it works in practice off the back of the winter fuel payment fiasco.

“The outrage caused by the government soon after it came into office will have left a lasting impression on pensioners, making this (and future) governments even more wary of trying to dilute pensioners’ benefits. This experience must surely dampen the chances of government changing the state pension terms or moving to a dual-lock – instead of a triple-lock – state pension any time soon, particularly given where Keir Starmer’s party currently sees itself in the polls.”

Source: DWP. Number of weekly pension credit applications in Great Britain, week commencing 26 February 2024 to week commencing 16 February 2026.

Claiming pension credit

For those on low incomes who are over state pension age, claiming pension credit can offer a valuable additional income top-up. If you live alone and have a weekly income of less than £227.10 (just over £11,800 a year) then you’ll be eligible for pension credit. The same applies to a couple with an income of £346.60 per week, equivalent to just over £18,000 a year. These rates are set to increase from April.

If you can demonstrate your income is below that threshold then pension credit effectively tops you up to that level. For someone living on their own with an income of £217 a week, pension credit will provide an additional £10 a week to supplement their income, taking it up to the pension credit threshold. Your income includes your state pension, other private pensions, employment or self-employment earnings and most social security benefits. 

Pension credit has historically been underclaimed, with many people not realising they may be entitled to the payments and failing to claim. Pension credit won’t be paid automatically, so you have to submit a claim through the DWP, which can be done online or over the phone. If you’re unsure whether to claim because you’re close to the income threshold, there’s no harm in submitting a claim – the worse that can happen is you find you’re not eligible.