The State Pension Credit is a means-tested welfare benefit designed to give individuals and couples a minimum level of income in retirement. It is not dependent on an individual’s NIC record and no tax is payable on it

When an applicant applies for State Pension Credit their income is calculated. This includes income from:

• State Pensions;
• private pensions;
• earnings;
• most social security benefits (e.g. Carer’s Allowance); and
• savings over £10,000.

Any savings are deemed to provide income of £1 for every £500 or part £500 of savings in excess of £10,000. So, for example, if someone holds £16,650 in an ISA, the income this is deemed to produce is (£16,650 – £10,000)/ £500 = £13.3. Therefore, as it is £1 per £500 or part thereof, this is rounded up to arrive at a deemed income of £14.