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By Jane Baker

What's more Savings Credit is available to anyone aged 65 and over who has saved for retirement. Here you may be rewarded with an extra payment of £19.71 a week if you're single and £26.13 a week if you have a partner. 

How does Pension Credit work?

You can work out how much Pension Credit you're entitled to using this online Pension Credit calculator. But here's a quick example:

Let's say...

• You are 65.
• No one else lives with you.
• You have savings of £5,000.00.
• You receive the full Basic State Pension of £90.70 a week
• You receive a private pension of £20.00 a week

In this case, you could be entitled to a Pension Credit payment of £25.05 per week, taking your total weekly income to £135.75.

Now I know these amounts aren't enough to allow you to see out the end of your days on luxury cruises and buying holiday homes in the sun. But the point is, if you're entitled to extra money, you should claim everything you deserve.

At the moment, 2.7 million households receive an average of £50 a week in Pension Credit. But, around £5 billion in benefits is left unclaimed every year. The Department for Work and Pensions (DWP) reckon these common misconceptions are causing people to miss out:

Five myths about Pension Credit

If you're beginning to think you may be eligible to apply for Pension Credit, then there is some good news: Payments can be backdated from the day you were first entitled to the date you apply. This is up to a maximum period of 12 months.

However -- and this is the important bit -- the rules are changing next month. From 6 October 2008, the maximum period for backdating Pension Credit payments is being cut from 12 months to just three months. That means, to make the most of missed payments, The Pension Service must receive your application before this date.

Unfortunately, there's just one month left to make your claim. You better get your skates on!

*Your entitlement to Pension Credit will be reduced by £1 for every £500 in savings you have above these limits.

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