The Pension Credit will be introduced on 6 October 2003 and will replace the Minimum Income Guarantee (Mig).

It will extend means testing to up to half of all pensioners.

However, it will not require a weekly means test - and the majority of pensioners will not have to notify changes in their financial circumstances for five years, the government has said.

The credit will ensure a minimum income of £102.10 a week for a single pensioner and £155.80 for couples.

How does it work?

The credit has two elements: The Guarantee Credit and Savings Credit.

The Guarantee Credit can be claimed by pensioners who are 60 or over, while the Savings Credit can only be claimed by pensioners who are 65 or over.

The Savings Credit has been created to reward pensioners who have a second pension or modest savings.

Pensioners aged 65 and over with modest savings up to £16,000 will qualify for all or part of the Pension Credit.

Anyone with savings worth more than £16,000 will not qualify.

How will I get it?

The government will be contacting people aged 60 and over about the new credit during 2003.

People who are already receiving Mig will get automatically be transferred to the Pension Credit.

The new credit will be administered through the Pension Service, a new government office which has been set up to help people claim state support.

There will eventually be 26 local advice centres for pensioners, offering face-to-face advice.

Local partnerships with organisations, such as charities, will also help people claim the credit.

Where can I get further information?