The amount of income and capital you have can affect your eligibility for means-tested benefits.
Different means-testing rules apply, depending on whether you're under or over the minimum state pension age. The information on this page only applies to people over the current minimum state pension age (rising from 60 to 65 between 2010 and 2020).
Pension Credit
For Pension Credit, there is no upper limit of capital above which you cannot claim the benefit. Savings or capital up to £10,000, and any income generated by those savings, are ignored. You will be treated as having ‘assumed income’ of £1 for every £500 (or part of £500) of capital you have above £10,000.
Housing Benefit
The lower capital limit for Housing Benefit is £10,000. If you have savings or capital of up to £10,000 these, and any income you receive from these savings, are ignored. You will be treated as having assumed income on capital above £10,000 as set out above.
Unlike Pension Credit, Housing Benefit also has an upper capital limit, which is £16,000. If you have more than this capital limit you will not be entitled to any Housing Benefit, unless you qualify for Pension Credit Guarantee Credit.
Valuation of capital
Your capital is generally assessed at its present-day value. If there would be expenses involved in selling your capital, 10% of its value will be deducted.
Any capital you own jointly with other people (besides your spouse, civil partner or partner) will normally be divided equally between the joint owners.
Capital taken into account:
Some types of capital are ignored. This includes the value of the property you live in, if you own it, and any lump sum payments you received after deferring your State Pension.
Income taken into account:
Some types of income are taken into account in full for means-tested benefits. Other types of income are disregarded in part.
Different means-testing rules apply, depending on whether you're under or over the minimum state pension age. The information on this page only applies to people over the current minimum state pension age (rising from 60 to 65 between 2010 and 2020).
Pension Credit
For Pension Credit, there is no upper limit of capital above which you cannot claim the benefit. Savings or capital up to £10,000, and any income generated by those savings, are ignored. You will be treated as having ‘assumed income’ of £1 for every £500 (or part of £500) of capital you have above £10,000.
Housing Benefit
The lower capital limit for Housing Benefit is £10,000. If you have savings or capital of up to £10,000 these, and any income you receive from these savings, are ignored. You will be treated as having assumed income on capital above £10,000 as set out above.
Unlike Pension Credit, Housing Benefit also has an upper capital limit, which is £16,000. If you have more than this capital limit you will not be entitled to any Housing Benefit, unless you qualify for Pension Credit Guarantee Credit.
Valuation of capital
Your capital is generally assessed at its present-day value. If there would be expenses involved in selling your capital, 10% of its value will be deducted.
Any capital you own jointly with other people (besides your spouse, civil partner or partner) will normally be divided equally between the joint owners.
Capital taken into account:
- Cash
- Money in bank or building society accounts, including current accounts that do not pay interest
- National Savings accounts and certificates (there are special rules for valuing these)
- Income bonds
- Stocks and shares
- Property (other than your own home)
- Premium Bonds
- A share of any savings you own jointly with other people.
Some types of capital are ignored. This includes the value of the property you live in, if you own it, and any lump sum payments you received after deferring your State Pension.
Income taken into account:
Some types of income are taken into account in full for means-tested benefits. Other types of income are disregarded in part.
- Pensions
- Earnings
- Income from annuities
- Most social security benefits
- Working Tax Credit
- Assumed income from savings
- Income from boarders or sub-tenants
- Maintenance payments from a spouse or ex-spouse.
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