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Benefits and tax allowances in retirement

When you retire, your income usually reduces. To help you manage, you may be able to get certain benefits on top of any State Pension you're entitled to. Some of these benefits are age-related, others depend on your income. Tax allowances are also more generous from age 65 if your income is below a certain level.

Your entitlements

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Basic State Pension

Eligibility for the basic State Pension depends on your record of National Insurance contributions (NICs). You can choose to claim your basic State Pension to get it when you reach State Pension age, or put off claiming it to get more later on.

Changes to State Pension age

You should be aware that the government has announced new proposals for increasing State Pension age. From December 2018 the State Pension age for both men and women will start to increase to reach 66 by April 2020. This will mean women’s State Pension age will increase more quickly to 65 between April 2016 and November 2018.

Any change to this timetable would need the approval of Parliament. The government is also considering the timetable for future increases to the State Pension age from 66 to 68.

Additional State Pension

The additional State Pension is also known as the State Second Pension (formerly the State Earnings-Related Pensions Scheme (SERPS) pension). Eligibility is based on a combination of your earnings from employment, and National Insurance contributions you have made or been credited with. You may also be eligible through other factors, such as a disability or because you've spent time caring for someone.

If you qualify, you'll automatically get the additional State Pension when you claim your basic State Pension.

Over 80 Pension

If you're aged 80 or over and have little or no State Pension, you may be able to claim the Over 80 Pension.

Pension Credit

If you have reached the qualifying age, you can apply for Pension Credit to top up your income to a weekly minimum.

Changes to State Pension age

The State Pension age for both men and women will rise in the future. The government has announced new proposals for increasing State Pension age. From December 2018 the State Pension age for both men and women will start to increase to reach 66 by April 2020. This will mean women’s State Pension age will increase more quickly to 65 between April 2016 and November 2018.

Any change to this timetable would need the approval of Parliament. The government is also considering the timetable for future increases to the State Pension age from 66 to 68.

Changes to the State Pension age are likely to affect the Pension Credit qualifying age.

Winter Fuel Payment

You may be able to claim a payment to help with fuel bills if if you have reached the qualifying age by the end of the third week of September. The age from which you can get Winter Fuel Payment – the qualifying age – is increasing in line with the State Pension age for women. There is also an extra £100 for eligible households that include someone aged 80 or over.

Cold Weather Payment

You may be eligible for a Cold Weather Payment to help with extra heating costs during periods of very cold weather. Payments are made automatically – you don't need to claim.

Warm Homes Scheme

If you're on a low income you may be able to claim up to £3,500 or in some cases £6,000 for heating improvements to your home.

Attendance Allowance

You can get Attendance Allowance if you're aged 65 or over and need help with personal care because of an illness or disability.

Carer's Allowance

If you look after someone who's severely disabled, you may be able to claim Carer's Allowance. If you're severely disabled, someone who looks after you may be able to claim Carer's Allowance.

Christmas Bonus

If you get certain benefits, including a State Pension, you'll get an extra £10 at Christmas.

Funeral Payment

A Funeral Payment can help with the cost of a simple funeral for someone close to you if you are responsible for arranging the funeral.

Community Care Grants and Budgeting Loans

Community Care Grants and Budgeting Loans can help cover the cost of one-off expenses including household items, clothing and footwear and certain travelling expenses.

Crisis Loans

Crisis Loans can be paid in an emergency or disaster to help with day to day living costs or essential items. They're available where there's a serious risk to you or your family and you can't get help from elsewhere.

Housing Benefit / Rate Relief

If you're on a low income and paying rent, you may be able to claim Housing Benefit.

Low cost bus passes

From age 60 you qualify for a free bus pass.

Free eye tests and help with other health costs

If you're aged 60 or over you may be entitled to help with various health costs, including prescriptions, eye tests and dental treatment.

TV licence reduction fee

You can get a free television licence if you're aged 75 or over – and pay a reduced fee when renewing between age 74 and 75.

War Widow's/Widower's pension

You can claim a tax-free pension if your husband, wife or civil partner died because of war service or received a War Pension or related allowance.

Age-related tax allowances

Tax-free personal allowance

Everybody gets a tax-free personal allowance – an amount of income you can have before you need to pay tax. If your income is below £22,900 for the tax year 2010-2011 the personal allowance increases when you're 65 and again when you're 75.

Married couple's allowance

If you're married or in a civil partnership and are a taxpayer and either you or your partner was born before 6 April 1935 you can claim married couple's allowance.

Help with claiming benefit

Some people need help with claiming benefit because they can’t manage their own affairs. This could be because they’re mentally incapable or are severely disabled. If so, another person - called an appointee - can be given the legal right to act for them. Find out about becoming an appointee.

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