By Tom Philips at February 15, 2023

Guide to Benefits and Entitlements For the Elderly

State benefits are government funds that are available to people who are in need. Some of them are available regardless of income, such as disability benefits, but others are only given to people who earn below a particular income.

State benefits help people to afford their lifestyle when they are not in a position to work, or when their employment income is not enough for them to survive on.

You can claim benefits for a temporary period, such as after losing your job, or you can claim them consistently for your entire life.

Benefits and Entitlements For the Elderly in the UK

As well as state benefits, there are certain entitlements that elderly people are eligible for in the UK. This may not mean monthly payments, but it can reduce the cost of important things, such as transport and food.

We are going to explain the main benefits and entitlements that are available to the elderly in the UK so that you can see what financial aid is out there.

1. Carer’s allowance

If you are caring for someone, whether you are related to them or not, you are entitled to weekly or monthly payments. This works out at up to £69.70 per week, but you can choose to have monthly payments instead.

This allowance is available to people who are spending at least 35 hours a week caring for someone. Only one person in the family qualifies for the payment, and you only receive one payment for being a carer, regardless of how many people you are caring for.

If you receive carer’s allowance, you will also get National Insurance credits, which will come in handy when it comes to qualifying for the State Pension.

There are also other schemes you could benefit from if you have carer’s allowance, such as pension credit, income support, government grants, council tax reduction, and Universal Credit.

Having said that, it is possible that you will not qualify for certain benefits if you earn a carer’s allowance, so this is something to keep in mind before you apply for this funding.

What’s more, if you earn more than £132 per week through working (after tax), you would not be able to get a carer’s allowance. You would also not be entitled to carer’s allowance if the person you are caring for does not have a qualifying benefit e.g. an Armed Forces independence payment or an Attendance Allowance.

2. Housing benefit

If you are struggling to pay your rent, you could access housing benefit to help you with this. You automatically apply for housing benefit if you are of State Pension age and you are low income, you are receiving benefits, or you are unemployed.

If your partner has not yet reached State Pension age, you would not be able to make a claim for Housing Benefit.

The same applies if you are paying a mortgage, if you are living with a relative, if you are already claiming Universal Credit, or if you have savings of over £16,000.

The amount of funding you could receive will vary depending on how much rent you pay, how many rooms are in your home, who you live with, whether you have savings, and whether you are claiming benefits (1).

Keep in mind that the housing benefit scheme is being replaced by Universal Credit, so get in touch with Citizen’s Advice to find out which one you need to be applying for.

3. Bereavement benefits

There are many different benefits you can claim due to bereavement. Some are specifically designed for bereavement, and others are general forms of financial aid that can be accessed when you are grieving. Here are some examples:

The bereavement support payment

The bereavement support payment is available to people whose spouse has died within the past 21 months. Within the three months of your partner’s passing, you can apply for this funding, and you would be more likely to be eligible for the full amount due to applying quickly.

Not everyone whose partner dies qualifies for this payment. You must be a UK resident who is below State Pension age. As well as this, your partner must have died due to an accident at work, and/or they must have paid at least 25 weeks worth of National Insurance payments since the 6th April 1975.

Please note that the bereavement support payment is a replacement for the bereavement payment, the widowed parent’s allowance, and the bereavement allowance.

War widow(er) pension

The war widow(er)’s pension is funding that is provided to people whose partner died in the Armed Forces before the 6th April 2005 (or died from an army-related injury years later).

We encourage you to make an application as soon as you can if you believe you may be eligible. This is because there is much more chance you will be entitled to funding if you apply earlier rather than later.

There are additional benefits available to people who receive a war widow(er)’s pension. For example, if you are at least 60 years old and you have a war widow(er)’s pension, you are entitled to 25% off a Senior Railcard for discounted rail travel (2).

Funeral expenses payment

It is no secret that funerals can be expensive, and not everyone can afford to give their loved one the funeral they deserve. This is what the funeral expenses payment is for.

You will either get a bank transfer to make up for the amount of money you have already spent, or the funeral organiser will receive the money so that you do not have to pay them yourself. The amount of money you are entitled to will vary depending on the value of the deceased person’s estate, and any money available through insurance policies.

The funeral expenses payment can cover the cost of death certificates, travel arrangements, cremation fees, burial fees, and the cost of moving the body. An additional £1000 is sometimes available for any extra funeral costs.

Guardian’s allowance

Anyone raising a child whose parents have died could receive money from the government to help with this. The amount is not significant, but it is a small top-up to the guardian’s income, so it is certainly worth claiming.

The standard rate of guardian’s allowance is £18.55 per week, and it is completely free from tax. It also does not interfere with the recipient’s entitlement to child benefit, so you can claim both at once.

Statutory parental bereavement pay and leave

If your child passes away, you may be able to take time off work to grieve if it occurred after the 6th April 2020, provided that you work in England. With the statutory parental bereavement pay/leave, you could either receive payment, get leave, or benefit from both.

Your job would be completely secure, so you would be able to return to work by the end of the leave period, and you would also still be entitled to changes such as pay rises.

Universal credit

Universal credit is a fairly new scheme that is replacing a wide variety of other benefits, including income support, housing benefit, working tax credit, child tax credit, income-based jobseeker’s allowance, and income-related employment and support allowance.

It is available to people on a low income or people who are unable to work. They are entitled to receive monthly payments to help fund their lifestyle.

The reason this is applicable to bereavement benefits is that many people experience a drop in income when their loved one dies, as they either go from two incomes to one, or they go from one to none at all.

This means they may need help with things like paying their mortgage or rent, paying their bills, and being able to afford food.

4. Council tax reduction

The council tax reduction scheme is designed for people who are claiming benefits or are on a low income, and are therefore more likely to be struggling to pay council tax.

The scheme is different in every council, so you need to look up your postcode to discover how your council can help you with council tax reduction. Some councils offer more money than others, or have wider eligibility criteria than others.

Other factors influence how much money you will have deducted off your council tax bill, including whether you have any children, what benefits you are claiming, your residency status, and your household income.

In some cases, you will receive total exemption from council tax payments. This is for people who are struggling with money and cannot afford to pay this bill.

5. Attendance allowance

Attendance allowance is available to elderly people who have a carer as a result of having a disability, or people who have a severe disability and no carer. If you receive attendance allowance, you may be able to claim other benefits in order to help you with the costs of your disability.

The amount of money you could receive varies from £61.85–£92.40 per week, according to the severity of your disability.

You can apply for attendance allowance by filling out a form online or calling the helpline on 0800 731 0122. Please keep in mind that you may need to attach supporting evidence such as care plans or medical notes from your GP (3).

If you are currently claiming disability living allowance and you are of State Pension age, this will most likely change to attendance allowance soon.

6. Support for mortgage interest (SMI)

As the title suggests, support for mortgage interest (SMI) is financial aid that is available to help you with the interest on your mortgage. As well as this, you could get support with paying interest on loans relating to your home i.e. home improvement loans or repair loans.

To qualify for SMI, you must be already claiming a qualifying benefit i.e. income-related employment and support allowance, universal credit, pension credit, income support, or income-based jobseeker’s allowance.

The money you receive can only go towards interest payments, and not the actual loan amount or missed payments.

Unlike the other benefits we have explained in this list, SMI is a loan, so you will need to pay back the money that you borrow with interest. However, the interest tends to be low. What’s more, there are no set-up fees, so you save money in this stage of the process.

The good news for low-income pensioners is that if you claim pension credit, you can get help with your mortgage interest payments immediately. However, if this does not apply to you, you could be waiting up to 39 weeks to get help (4).

7. Pension credit

If you are a low-income pensioner, you can claim pension credit to top-up your retirement income, as well as receiving a State Pension (if you qualify for one).

The good news is that if you qualify for pension credit, you also qualify for many other entitlements e.g. NHS dental treatment, council tax discount, SMI, free TV licence, and housing benefit.

If you look after a child, you are a carer, or you have a severe disability, you could get higher amounts of pension credit.

Unfortunately, many people are not claiming pension credit as they do not realise they are eligible. This applies to 800,000 households in the UK (5). We encourage you to check your eligibility as you could potentially receive thousands of pounds a year.

8. State pension

The State Pension is available to all men born on or after the 6th April 1951 and all women born on or after the 6th April 1953 who have at least 10 qualifying years on their National Insurance record.

Most people qualify for the State Pension as they have worked for at least 10 years and therefore they have enough National Insurance payments to be fit for the scheme. However, you could also qualify if you have paid voluntary National Insurance contributions, or if you have National Insurance credits from caring for someone, being too ill to work, or being unemployed.

The full State Pension is up to £185.15 per week, but you will not necessarily receive all of this. Equally, if you defer your State Pension, you could get more than this.

If you apply for the State Pension immediately, you will get it within 5 weeks. However, after this, your payments will be every four weeks.

Some people worry that they will not receive a State Pension if they have been self-employed, and this is a misconception. Self-employed people are entitled to the State Pension as they are still making National Insurance contributions.

9. Cold weather payment

The cold weather payment comes into effect when the weather is below zero degrees celsius for at least 7 days in a row. The idea is that bills will be more expensive when the weather is this cold, so you are entitled to funding to help you with the higher costs.

The amount of money you will receive is £25 for each seven-day period of below zero temperatures, and this only applies between the 1st November to the 31st March.

It is well known that people with pension credit qualify for the cold weather payment, but you could also qualify if you get universal credit, jobseeker’s allowance, income support, employment and support allowance, or SMI.

10. Winter fuel payment

The winter fuel payment is funding that is offered to pensioners for their heating bills. You must be born on or before the 25th September 1956 to qualify. You must also be a recipient of the State Pension, or another qualifying benefit.

Most often, pensioners claiming the winter fuel payment get paid in November or December, but payment is sometimes at the beginning of January.

You get a different amount of money depending on your age and circumstances.

If you were born between the 26th September 1942 and 25th September 1956, you could get £250 if you live in a care home and do not receive benefits, or if you live with someone else who qualifies, whether they are over 80 or not. If you live alone, you could get £500.

If you were born on or before the 25th September 1942, you could get £300 if you live with a qualifying individual who is over 80, or you live in a care home and do not claim benefits. This payment rises to £350 if you live with someone over 80 years old who also qualifies, and £600 if you live alone.

The payments that apply to living alone also apply if you are living with people who do not qualify for the winter fuel payment.

11. Warm home discount

You will be pleased to know that the warm home discount, which reduces your winter electricity bill, can be applied alongside the cold weather payment and the winter fuel payment.

It is available to people on a low income who have high energy costs, and people on the Guarantee Credit element of Pension Credit.

As with most winter schemes, this is a single payment rather than a regular source of income for pensioners. It is paid between October to March, and it is up to £150 off your bill.

12. Concessionary travel

People above a certain age are often able to travel for discounted prices, and sometimes even for free.

When you reach State Pension age in England, you can apply for a free bus pass on the government website. In Wales, you can access a free bus pass at age 60, and in London, the same applies, but you can only travel within London for free.

As for train travel, you can get a Senior Railcard when you turn 60 years old, which means you can get on any train for 33% less money.

13. Free eye tests and dental care

People aged 60 years old and over can get free dental treatment if they are claiming a qualifying benefit, such as the Guarantee Credit part of pension credit, jobseeker’s allowance, universal credit, employment and support allowance, and income support.

As well as this, if you are a low-income pensioner, you can get discounted dental care and discounted travel to the dental practice.

Over-60s also benefit from free eye tests and free prescriptions.

14. Free TV licence

If you get pension credit and you are aged at least 75 years old, you could get a free TV licence. If you live with someone else, they must also meet this eligibility criteria.

15. Telephone friendship

This entitlement is different to the others, as it is not related to financial support. Telephone friendship is a scheme that allows the elderly to connect with people over the phone and spend time getting to know them.

Many different charities offer this service, and AgeUK is just one of them. The eligibility criteria for AgeUK include being 60 or over, being available for at least one weekly phone call, being able to talk on the phone and comprehend what is being said, and having a phone (either landline or mobile) (6).

Some charities go further and offer comprehensive befriending services. This means you could benefit from not just talking to a volunteer, but receiving help for things you struggle with, whether that’s cooking, shopping, using technology, or cleaning.

What Happens If I Have Not Saved Enough For Retirement?

If you have not saved enough for retirement, some of the aforementioned schemes could be hugely beneficial to you. You would be more likely to qualify for them than someone who has a high income, as most of them are means-tested.

Contact Citizen’s Advice to find out which schemes you are eligible for, or head to the government website and look into each scheme individually. This will ensure you are receiving all the funding you are entitled to.

The good news is that you are very likely to qualify for the State Pension if you have been working or getting National Insurance credits, so when you reach State Pension age, this will be a very important source of income for you.

If you do not qualify, you could choose to make voluntary National Insurance payments until you are eligible for the money.

It is also possible that you will have a workplace pension if you worked and did not opt out of it. Your employer is required to pay money into the workplace pension for you unless you state otherwise.

Can I Loan Money as a Pensioner?

If you are over State Pension age, it can be much more difficult to loan money. Most lenders have an eligibility criteria that includes income, and if you are no longer working, you may have a lower income.

Some pensioners are fortunate enough to have plenty of funding in pensions (workplace and private pensions) and savings, so they would find it easier to get a loan, but this is not applicable to everyone.

Another reason it is harder to loan money as a pensioner is that some lenders have a maximum age requirement for a loan, which usually starts at 60 years old, but can be much higher. This means you may struggle to find a lender who is willing to lend you money.

It does depend which kind of loan you are interested in, as it would be much easier to get a credit card than it would be to take out a mortgage. Rest assured that it is not impossible for a pensioner to borrow money.

However, if you are struggling, there are alternatives you can turn to. One suggestion is to borrow from your loved ones, as you do not need to meet a criteria to do this, and it can be a quick and easy way to boost your income temporarily, with the knowledge that you will soon be able to repay the money.

Another option is to continue to work beyond the State Pension age. The longer you delay your pension, the more money you will get from it, so it can be a good idea to do this. However, we would only suggest doing this if you have some savings to lean back on for a while, or your employment income is enough to cover you for a few years.

Finally, some schemes do not put you at a disadvantage for being elderly, so you could turn to these in times of need.

Equity release is a great example of this, as it targets people over the age of 55, whether they are claiming the State Pension or not. We will explain how equity release could benefit you so that you can make an informed decision on whether it would be a good decision for you and your family.

Taking Out Equity as a Pensioner

We have explained that it can be very difficult for a pensioner to lend money, which is why equity release is excellent for people in their later life, as not only does it allow older people to lend money, but it encourages it.

You can take out equity if you are 55 years old or more, and you own a home that is worth £70,000 or more. As you are loaning money against your property, you are likely to be able to release large amounts.

The older you are, the more you could benefit from equity release. This is because you could get lower interest rates and higher loan amounts. Some equity release lenders do impose a maximum age limit, but many do not.

You can release equity from your property whether you are claiming a State Pension or not, and whether you are still working or you have been retired for a long time. This is because your income does not affect how much money you can release — only your property value does.

If you are using your equity loan as a way to boost your retirement income and become financially stable, we would first recommend paying off any existing debts you have with your loan. Something else we would recommend is getting an equity release plan that involves monthly payments, and using these payments to pay your bills.

You could also pay for a one-off expense that would save money in the long run, such as purchasing an electric vehicle or renovating your home. To do this, you would have to get a lump sum payment. This money would be tax-free, just as the monthly payments would be.

Something to keep in mind is that the equity loan is repaid when you go into long-term care or when you die. Your family informs the equity release provider of the situation, and then the provider arranges to sell your property and take the money that you owe from the sale.

This means that while you are still alive, you do not have to make a single repayment of your loan or interest. All the money you receive from the equity release lender is yours, so you have plenty of options when it comes to improving your retirement.

That being said, if you are able to afford repayments, you are free to do this, and it will keep your debt lower. You could do this by repaying the interest with an interest only lifetime mortgage, or repaying the loan amount with a voluntary repayment lifetime mortgage.

To benefit from equity release as a pensioner, get in touch with us on 0330 058 1579. We will explain how the scheme works and how you can get involved with it.

Equity release is a great way of avoiding later life poverty or making your retirement more comfortable, but it is not suitable for everyone, so please speak to one of our advisers to find out whether you should consider this scheme.

References

[1] Housing Benefit https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/housing-benefit/

[2] War Widow(er)’s Railcard https://support.veteransgateway.org.uk/app/answers/detail/a_id/45/p/0/c/62/Finances/Benefits/War-Widow(er)%E2%80%99s-Railcard

[3] Attendance Allowance https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/attendance-allowance/

[4] Support For Mortgage Interest (SMI) https://www.citizensadvice.org.uk/benefits/support-for-mortgage-interest-smi/support-for-mortgage-interest-smi/deciding-if-you-should-apply-for-smi/

[5] Pension credit – boost your retirement income with a state top-up

[6] Age UK telephone friendship https://www.ageuk.org.uk/services/befriending-services/sign-up-for-telephone-befriending/