Universal credit: Pensioners
This section of the website explains the interactions between Universal Credit, Pension Credit and tax credits for people who have reached state pension credit qualifying age. There is a tool on the GOV.UK website that gives the qualifying date based on an individual's date of birth.
- Pension Age and UC claim
- Pension Age and tax credits
- Existing tax credit claimants
- Tax Credit Closure notice process
Generally, claimants who have reached their qualifying state pension credit age are not entitled to UC because they do not meet the basic conditions of the benefit on age grounds due to the UC upper age limit. From 8 June, the upper age limit is waived for some existing tax credit claimants who have reached state pension credit age, who are entitled to working tax credit and who are not entitled to state pension credit. This only applies to existing tax credit claimants who are issued with a migration notice by DWP.
There is a routine exception to the general rule for couples where one member of the couple is below state pension credit qualifying age and the other member has already reached that age. This scenario is often referred to as a 'mixed age couple'. As a result, mixed age couples are entitled to universal credit.
From 15 May 2019, most mixed-age couples can no longer make a new claim for pension credit and are generally expected to claim UC instead. However, mixed age couples who were claiming housing benefit under pension age rules on 14 May 2019 can make a new claim for pension credit if the housing benefit award has been paid continuously since this date. We refer to these a ‘protected’ mixed age couples. Our understanding is that there is nothing technically stopping a UC claim from these mixed age couples, but they may be better off financially claiming pension credit rather than UC. Specialist welfare rights support should be obtained before any claim is made to understand the correct position. Further information is available from Age UK factsheet.
Mixed age couples who were entitled to pension credit on 14 May 2019 can stay on pension credit provided there is no break in claim. Our understanding is that there is nothing technically stopping such couples from claiming universal credit but if they do their pension credit claim will terminate and they won’t be able to claim it again and instead will have to rely solely on UC which may be a lower amount. This is because a claimant is usually not entitled to state pension credit in respect of any period when the claimant is entitled to UC (although there are a few exceptions to this rule).
If someone is claiming pension credit as a single person because they have reached state pension credit age and they become a couple with someone who is under state pension credit age then their pension credit claim will stop and they may have to claim universal credit instead.
From 1 February 2019, people who have reached their state pension credit qualifying age can no longer make a new claim for tax credits. If someone who has reached state pension credit qualifying age is part of a couple with a younger partner (a mixed age couple) HMRC state they cannot claim tax credits either.
This also means that anyone in this situation having a change of circumstances that ends their tax credit claim will not be able to make a new tax credit claim at a later date.
For example, if a single claimant aged 68 currently receiving working tax credit moves in with a new partner, their tax credit award will end because they will need to make a new joint claim for support. They cannot make a new joint claim for working tax credit. What they can claim depends on whether they are a 'mixed age' couple or if they have both reached state pension credit qualifying age.
Mixed age couples
Mixed age couples can claim UC. Until 15 May 2019, they were also able to claim pension credit which, from 1 February 2019, also includes child elements. The rules are similar to the child elements in CTC, although there is no support towards childcare costs provided through pension credit. It should also be noted that the 2 child limit does not apply to pension credit. From 15 May 2019, most mixed age couples can no longer claim pension credit and they will be expected to claim UC instead – however as explained above there is one exception to this for mixed age couples who were claiming housing benefit under pension age rules on 14 May 2019 who are still able to make a new claim for pension credit if the housing benefit award has been paid continuously since this date.
Those who have reached state pension credit qualifying age
For couples where both partners have reached state pension credit qualifying age or for single people who have reached this age, the only option to make a new claim for support is pension credit (with housing benefit if appropriate). From 1 February 2019, it is no longer possible to make a brand new claim for tax credits.
It is expected that pension credit will eventually be further enhanced to include support towards housing costs. In the Chancellor’s 2022 Autumn Statement, it was announced that the government’s plans to create a new housing element of pension credit to replace pensioner housing benefit are now intended to take effect in 2028-29.. Currently, pension claimants are expected to claim help towards their housing costs through housing benefit. From 8 June 2024, the 2 child limit in housing benefit is abolished for those who have reached state pension age.
Capital
In pension credit, for each £500 of capital over £10,000, £1 is added to the person's income when calculating their entitlement.
In UC, for each £250 of capital over £6,000, £4.35 a month is added to the person's income when calculating their entitlement. Once capital reaches £16,000, there is no entitlement to UC.
There is no limit on capital in tax credits. In tax credits, actual capital is ignored and instead income from investments (e.g. interest on the capital or savings) is taken into account.
Tax credits are ending. Existing tax credit claimants who do not move voluntarily or naturally due to a change of circumstances will be asked to move to universal credit or pension credit under a managed migration process. A very small number of claimants, who will not be entitled to either pension credit or universal credit will have their tax credits stopped on 5 April 2025 under current plans.
The time table for completion of the move has changed several times and information about the latest position is available on the GOV.UK website.
Information about the timetable for tax credit claimants who have reached their state pension age (both, in a joint claim) to move to pension credit is now being made available on the GOV.UK website. See our 'existing tax credit claimants' section.
Existing tax credit claimants who have reached state pension credit age (or are part of a couple where one person has) will either be invited to claim universal credit or pension credit depending on their circumstances. Those invited to claim universal credit will follow the existing managed migration process which is explained in our managed migration section. Those invited to claim pension credit, or who are already claiming pension credit, will follow the tax credit closure notice process.
The following tables summarises the position for existing tax credit claimants who have reached state pension age or who are part of a mixed age couple and who are still receiving tax credits. The information in the table assumes tax credits do not end for any other reason.
Table 1: Single tax credit claimants who have reached state pension credit age and couples who have both reached state pension age
| Situation | Universal credit or pension credit |
|
Entitled to WTC only and NOT entitled to state pension credit |
Will be invited to claim universal credit via the managed migration process. They will be issued with a migration notice. If a claim for UC is not made by the deadline date in the notice, tax credits will be terminated.
UC Transitional protection rules will apply – with an additional protection to disregard deferred state pension income for the first 12 assessment periods and to exempt such claimants from the benefit cap.
New rules have been introduced that determine when transitional protection ends in these cases. |
|
Entitled to WTC only and entitled state pension credit |
Will be issued with a tax credit closure notice process at some point before 5 April 2025. This will state the date that tax credits will end. The pension credit claim will continue.
Pension credit transitional protection rules will apply (see below). |
|
Entitled to WTC and CTC and NOT entitled to state pension credit |
Will be invited to claim universal credit via the managed migration process. They will be issued with a migration notice. If a claim for UC is not made by the deadline date in the notice, tax credits will be terminated.
UC Transitional protection rules will apply – with an additional protection to disregard deferred state pension income for the first 12 assessment periods and to exempt such claimants from the benefit cap.
New rules have been introduced that determine when transitional protection ends in these cases |
|
Entitled to WTC and CTC and entitled state pension credit |
Will be issued with a tax credit closure notice at some point before 5 April 2025. This will state the date that tax credits will end. The pension credit claim will continue.
Pension credit transitional protection rules will apply (see below). |
|
Entitled to CTC only and not entitled to state pension credit
(Note that claimants may be entitled to WTC but their award is zero due to their income – these claimants are still counted as entitled to WTC and are not CTC only claimants) |
Will be issued with a tax credit closure notice at some point before 5 April 2025. This will invite a claim for state pension credit by a deadline date. Tax credits will end either the day on which the pension credit claim is made or, if later, the deadline day.
Pension credit transitional protection rules will apply (see below). |
|
Entitled to CTC only and entitled to state pension credit |
Will be issued with a tax credit closure notice at some point before 5 April 2025. This will state the date that tax credits will end. Pension credit claim will continue.
Pension credit transitional protection rules will apply (see below). |
Table 2: Mixed age tax credit couples – where one person has reached state pension age and the other has not
| Situation | Universal credit or pension credit |
|
Mixed age couple who are not currently entitled to state pension credit but who are entitled to:
** - see below if the couple are a protected mixed age couple entitled to CTC only |
Will be invited to claim universal credit via the managed migration process. They will be issued with a migration notice. If a claim for UC is not made by the deadline date in the notice, tax credits will be terminated.
UC Transitional protection rules will apply – with an additional protection to disregard deferred state pension income for the first 12 assessment periods. |
|
Mixed couple who are entitled to state pension credit and also entitled to:
|
Will be issued with a tax credit closure notice at some point before 5 April 2025. This will state the date that tax credits will end. The pension credit claim will continue
Pension credit transitional protection rules will apply (see below) |
|
Protected mixed-age couple entitled to:
A protected mixed age couple in this part of the table means a mixed age couple who were claiming housing benefit under pension age rules on 14 May 2019 and have continued to receive housing benefit since this date. These couples are able to claim pension credit, whereas other mixed age couples are not.
|
Will be issued with a tax credit closure notice at some point before 5 April 2025. This will invite a claim for state pension credit by a deadline date. Tax credits will end either the day on which the pension credit claim is made or, if later, the deadline day.
Pension credit transitional protection rules will apply (see below). |
|
Protected mixed-age couple entitled to:
A protected mixed age couple in this part of the table means a mixed age couple who were claiming housing benefit under pension age rules on 14 May 2019 and have continued to receive housing benefit since this date. These couples are able to claim pension credit, whereas other mixed age couples are not. |
Will be invited to claim universal credit via the managed migration process. They will be issued with a migration notice. If a claim for UC is not made by the deadline date in the notice, tax credits will be terminated.
UC Transitional protection rules will apply – with an additional protection to disregard deferred state pension income for the first 12 assessment periods.
Note that it is possible for a couple in this situation to claim pension credit instead. Usually a pension credit claim is not possible by a mixed age couple but there is an exception in this situation, but if they do so they will not receive any transitional protection. Transitional protection will only apply if they claim universal credit. |
UC migration notices
As set out in the table above, some tax credit claimants who have reached state pension credit age will be migrated to universal credit.
With effect from 8 June 2024, the upper age limit in UC is waived for tax credit claimants who are issued with a migration notice and claim UC in line with that notice. This will apply to those who have reached state pension credit age and who are entitled to working tax credit (whether with or without child tax credit). This waiver ends if the person claims state pension credit or transitional protection ends for another reason. In addition:
- deferred state pension is not included as unearned income for the UC award for the first 12 assessment periods (or UC indicative amount), but where the person deferring their state pension is also in receipt of UC, the state pension does not accrue additional amounts.
- the benefit cap will not apply to the UC award for claimants who have reached their state pension age (both in a joint claim)
In cases where the upper age limit in UC is waived for tax credit claimants – a UC migration notice will be issued. However, it is possible for these tax credit claimants to claim pension credit instead. If they do that instead of claiming UC, no transitional protection will apply. If they do claim UC and then decide to claim pension credit instead, the upper age limit waiver in UC will end as will any transitional protection.
Protected mixed age couples (see table above for what we mean by protected) who are entitled to working tax credit will receive a UC migration notice, even though they are, due to an exception allowed to claim pension credit. They can if they so wish opt not to claim UC when they receive their migration notice and claim pension credit instead – but no transitional protection will be given if they do so. If they do claim UC, amendments have been made to legislation so that they remain able to claim pension credit if UC ends.
Tax credit closure notice process
Tax credit closure notices are introduced by legislation with effect from 8 June 2024. The table above sets out who will be issued with a tax credit closure notice. Pension credit transitional protection may be available if the tax credit claimants are already entitled to state pension credit they are issued with their tax credit closure notice or if they claim state pension credit after they receive their tax credit closure notice but within a period of one month from the date of the deadline in the notice. The tax credit closure notice will advise them that their tax credits award will end from a specified date and the award will be finalised under in-year finalisation rules.
In addition to transitional protection, there are some temporary changes to the pension credit rules for people who are issued with a tax credits closure notice and who make their pension credit claim before the deadline day in the notice or within a month of the deadline day in the tax credits closure notice which mean that:
- If they defer claiming their state or non-state pension, their deferred amount is not treated as notional income for their pension credit claim for the first 52 weeks of their pension credit claim, or, if sooner, the day they stop being entitled to pension credit.
- The 2 child limit in housing benefit is lifted for people claiming housing benefit who have reached their state pension credit qualifying age
Last reviewed/updated 20 June 2024