What is savings credit please, when attached to a pension?

FindMyWayBack

Hi, please can someone explain about savings credit. I have Googled and Googled and I can't make any sense of it, I have also searched posts on here etc.
My Dad is in his 80's and was widowed a few years ago. He has no other income apart from his  basic pension and this 'savings credit' bit extra on top of it. He has no private pension or income from capital. This 'savings credit' pushes him just a bit over the threshold meaning he can't get pension credit. He gets a tiny bit towards his council tax and he is still paying a small mortgage, there was no policy to pay it off. 
As you can imagine money is very tight. I spoke to the pensions service and they said he is being rewarded a few pounds a week as he saved towards his pension.... I just don't understand it, he hasn't got any savings, what do they mean saved towards his pension? He only paid like anyone else does  contributions from his wages. For many many years he was a carer in receipt of carers allowance so he only got the basic contribution paid for him as he was getting carers allowance.
It seems they  are paying this 5 or 6 pounds a week to him as a 'reward' but it's not a reward it makes him very hard up because it means he can't get pension credit.
I am baffled, please can someone advise.....

Malthusian

Savings Credit is part of Pension Credit - see https://www.gov.uk/pension-credit.

If he is getting Savings Credit it is not depriving him of anything, quite the opposite - Savings Credit goes on top of Guarantee Credit. If a barista fills my mug with coffee and then adds whipped cream on top, the cream's not taking up space that could have been used for more coffee.

At his age is it worth converting the mortgage to rolled-up interest for some extra income, assuming "paying the mortgage" means out of his income? Or selling the house, paying off the mortgage and downsizing / renting?

Brynsam

Your dad IS getting pension credit - both the guarantee part and the 'extra' savings credit.

Not sure why your googling didn't help, but there's an excellent clear explanation here: https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-and-benefits/pension-credit-aj4ck5n7vl9q

FindMyWayBack

I am going to try to answer the questions put to me:
Firstly this is what it says on that link:  What is savings credit?
The government will give people a little extra money to reward them for saving towards their retirement. ******* He has no savings, saved towards his retirement ********
This comes in the form of savings credit. Savings credit is only available for people who reached state retirement age before April 2016. However, if you're in a couple and your partner reached state pension age before 6 April 2016, you could still qualify.  There's a few criteria that you needed to meet (and still do) before you qualified for savings credit: you have a minimum income of £150.47 a week if you're single, and £239.17 a week if you're in a couple in 2020/21 you or your partner must be 65 or over you must be living in the UK you must have made some provisions for your retirement, such as savings or a second pension. ****** He has neither of these, so why is he getting it? *******

Read more: https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-and-benefits/pension-credit-aj4ck5n7vl9q - Which?    The above is from that link, and he doesn't fit into the category. 

FindMyWayBack

Malthusian said:

At his age is it worth converting the mortgage to rolled-up interest for some extra income, assuming "paying the mortgage" means out of his income? Or selling the house, paying off the mortgage and downsizing / renting?

I don't understand what any of that means sorry. How can a person in their 80's change a mortgage? What is rolled up interest please?
Renting would cost a load more than the mortgage, and the upheaval for a man of his age is unrealistic.

FindMyWayBack

Looking at the criteria for this 'savings credit' he just doesn't fit the requirements, no savings, just normal contributions, and no private pensions, sorry still baffled.
The pension service told me he is not getting pension credit, only the savings credit.
I know this because we had to make complicated enquiries about the TV licence as he doesn't get pension credit only savings credit, it's the same with the warm home discount, he has to make a full application as he doesn't get means tested pension credit he gets an ordinary pension, with this savings credit thing, there are no savings or private pensions.

xylophone

Your dad IS getting pension credit - both the guarantee part and the 'extra' savings credit.

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf

Savings Credit is paid to people aged 65 and over. If you reached State Pension age after 5 April 2016, you cannot make a new claim for it. Existing claimants can continue to receive it. Savings Credit is worked out by looking at the level of retirement provision you have made. It may be paid as well as Guarantee Credit or on its own.

See above. It is possible to receive only savings credit.

xylophone

Hi, please can someone explain about savings credit. I have Googled and Googled and I can't make any sense of it, I have also searched posts on here etc.

 https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf

In around March, your father will have received a letter from DWP showing his state pension entitlement for this year.

Can you upload, blanking out all personal details?

Is this his only income?

Are you saying that he has no savings whatsoever?

xylophone

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/898908/pc10s-a-detailed-guide-to-pension-credit-for-advisers.pdf

Above is really detailed.

xylophone

And helpful table here
https://adviser.royallondon.com/technical-central/rates-and-factors/pension-credit/

Alice_Holt

And more info here:  https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf
Age UK's benefit calculator :  https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/benefits-calculator/

If you are unable to use the calculator, then per xylophone's suggestion give us exact details of your father's pension, other income, and savings (if any), and we should be able to tell you if he is getting the correct Pension Credit component and amount. 
From your post citing his "ordinary pension", then I presume this state pension is over the amount at which Guaranteed Pension Credit of £173.75 pw  can become payable?  
If his state pension (and all other income) is less than £173.75 then Guaranteed Pension Credit would be paid to top him up to this level.

Does he have care needs, and if so have you looked at Attendance Allowance?   
https://www.gov.uk/attendance-allowance
https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/attendance-allowance/