Britons are being urged to check whether they’re eligible to claim extra money through Pension Credit to help with living costs.

The benefit, which is distributed by the Department for Work and Pensions (DWP), is tax-free and worth an average of £3,500 a year.

Writing on X, formerly known as Twitter, the DWP wrote: “Are you aged 66 or over? It's simple to check if you could be entitled to extra money worth, on average, £3,500 a year.”

Based on the DWP’s most recent data from 2022, approximately £1.7billion worth of this benefit remains unclaimed, yet it has the potential to uplift hundreds of thousands of pensioners out of poverty.

Even a small Pension Credit award can open doors to other benefits, including help with housing costs, council tax reduction, and heating bills, as well as additional grants, such as cost of living payments.

Who is eligible for Pension Credit?

To claim, a person must live in England, Scotland or Wales and have reached the state pension age (currently 66 and over). They or their partner must also be in receipt of housing benefit.

If this applies, people should then work out their total weekly income. This is calculated to their state pension, other pensions, earnings from employment and self-employment, and most social security benefits, such as Carer’s Allowance.

Not all benefits are counted as income. For example, the following are not counted and shouldn’t be included in the calculation:

People are most likely to be eligible for Pension Credit if their total weekly income is roughly under £220. However, if their income is higher, they might still be eligible so it’s worth checking.

How much is Pension Credit?

There are two types of Pension Credit available - Guarantee Credit and Savings Credit. Successful claimants can also get access to additional benefits, such as help with NHS dental care, and council tax discounts, meaning more savings can be made.

Guarantee Credit tops up a person’s weekly income to £201.05 if they are single, or £306.85 for joint claimants.

Savings credit provides people with an additional £15.94 a week if they’re single, or £17.84 a week for those with partners.

This component works as an additional top-up and is targeted at those who have made some provision towards their retirement by saving or contributing to a pension other than the basic state pension.

People may get extra amounts if they have other responsibilities, conditions and costs to account for, and the full list can be found here. The online Pension Credit calculator can also help pensioners check if they’re likely to be eligible and get an estimate of what they may receive.

How to claim Pension Credit

Pension Credit can be claimed online or by phone, and people can apply up to four months before reaching the state pension age.

People can apply any time after they reach state pension age but their application can only be backdated by three months, making it important to act fast if a person thinks they could be eligible.