Pension Credit and housing costs: a guide for older private tenants

If you are of state pension age and renting privately with a low income, Pension Credit may help with your housing costs. You will find out how Pension Credit can help older private tenants, how it interacts with other housing support, and what to do if your housing costs are not fully covered.

What is Pension Credit?

Pension Credit is a means-tested benefit for people who have reached state pension age and have a low income. It tops up your weekly income to a minimum guaranteed level. There are two parts:

• Guarantee Credit: tops your weekly income up to a minimum threshold (the standard minimum guarantee)
• Savings Credit: available to some people who reached state pension age before 6 April 2016 and who have some savings or a second pension

Pension Credit is separate from the state pension, you can receive both at the same time.

Can Pension Credit help with rent?

Pension Credit itself does not include a specific component for rent. However, receiving Pension Credit has an important effect on your housing support:

• It passports you to full Housing Benefit, if you receive Guarantee Credit, you are eligible for Housing Benefit up to the full rate for your area (the Local Housing Allowance rate for private tenants), regardless of your savings. Normally, savings above £16,000 can reduce your Housing Benefit, but this rule is waived if you receive Guarantee Credit.

• It passports you to Council Tax Reduction, receiving Pension Credit typically qualifies you for a significant reduction in your council tax.

• It may open access to other support, including free NHS dental treatment, Cold Weather Payments, and in some cases Warm Home Discount.

What is the Local Housing Allowance (LHA)?

The LHA is the rate used to calculate Housing Benefit (or the housing cost element of Pension Credit for pre-2019 pension age claimants) for private renters. It is based on the lower quartile of local rents in your area.

If your rent is higher than the LHA rate for your area and household size, Housing Benefit (even at the full rate) may not cover all of your rent. You may have a shortfall.

What can I do if my housing costs are not fully covered?

If your rent is more than Housing Benefit covers, options include:

• Applying for a Discretionary Housing Payment from your local council, this can help with a temporary shortfall
• Speaking to your landlord, some landlords will accept a lower rent to keep a reliable tenant, particularly in the current housing market
• Checking whether your benefit is being calculated correctly, errors do occur; Citizens Advice or a local welfare rights service can check your entitlement
• Considering whether to move to a cheaper property if the shortfall is ongoing and cannot be resolved

Is Pension Credit the same as Universal Credit?

No. Pension Credit is specifically for people who have reached state pension age. People of working age, or mixed-age couples in certain situations, may instead be on Universal Credit. Pension Credit is a separate legacy benefit that is still being claimed by millions of older people. If you are over state pension age, you should not be on Universal Credit for your housing costs, check whether you are receiving the correct benefit.

Are there people eligible for Pension Credit who have not claimed it?

Yes. Pension Credit is significantly underclaimed, it is estimated that hundreds of thousands of eligible older people are not claiming it. If you are over state pension age with a low income, it is worth checking whether you are entitled, as the benefit can have a significant effect on your overall income and access to other support including housing costs.

Does my right to a maintained home depend on my income?

No. Your landlord's obligation to keep the property in repair exists regardless of your income or benefit status. If there is damp, mould, broken heating, or structural problems in your rented home that your landlord has not fixed, you have the right to bring a housing disrepair claim regardless of how your rent is funded.

When should I contact Support for Tenants?

If you are an older tenant in a privately rented home with disrepair that your landlord has not fixed, call us. Your age, income, and benefit status do not affect your right to a maintained home.

Call us on 0800 030 4669. No upfront cost. You only pay if you win, and the fee comes out of the compensation, not your pocket. If you don't win, you pay nothing.

Sources

• State Pension Credit Act 2002 (legislation.gov.uk)
• Pension Credit (GOV.UK)

Related articles

• Local Housing Allowance shortfall, what to do when your benefit does not cover your rent
• Attendance Allowance, what it is and how it helps
• Discretionary Housing Payment, what it is and how to apply