New figures released by the UK Government show that up to 850,000 families who were entitled to receive Pension Credit did not claim the benefit in the financial year 2019 to 2020.
The Department for Work and Pensions (DWP) said up to £1.7 billion of available Pension Credit went unclaimed. On average, this amounted to around £1,900 per year for each family entitled to receive the ‘gateway’ benefit.
Pension Credit gives people extra money to help with living costs if they are over State Pension age and on a low income - an estimated seven out of 10 of those entitled to Pension Credit did claim.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “Pension Credit take-up continues to inch up but there are still up to 850,000 pensioner households missing out on this vital benefit.
“Pension Credit boosts the income of the poorest pensioners and acts as a valuable gateway to other benefits such as help with heating bills and NHS treatment. If you are aged over 75 you are also entitled to a free TV licence.”
Up to 260,000 older people who were entitled to receive Housing Benefit did not claim the benefit either, according to the figures.
On average, this amounted to around £4,000 per year going unclaimed.
Helen said: “These are enormous sums of money that could really boost people’s income in retirement, and it is vitally important that those who think they may be entitled to support check to see if they are entitled.”
Morgan Vine, Head of Policy and Influencing at Independent Age, said: “This slight increase in Pension Credit uptake falls massively short of what older people need. It is scandalous that up to £1.7 billion set aside to help people over 65 entitled to support is still not reaching them, especially as we battle against an unprecedented cost-of-living crisis.
“We know Pension Credit has the potential to lift 440,000 older people out of poverty, yet it still has the lowest uptake of any income-related benefit. Too many people in later life are still having to choose whether to heat their home or buy food, despite being eligible for financial support.”
Independent Age has been calling on the UK Government to urgently create an action plan that includes a sustained approach for effective awareness campaigns, a full communications strategy, new, high quality, up-to-date research into who is not claiming Pension Credit and why.
Morgan added: “We also want the Uk Government to look at innovative technical solutions such as partial auto-enrolment which would ensure that more people eligible to this money receive it.
“As the cost-of-living crisis continues to put pressure on older people’s finances with inflation at a 30-year high and rocketing energy and food prices, we need to see urgent action from the UK Government so that by next year more older people get the support they are entitled to.”
Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants Lane Clark & Peacock, said: “DWP should be much more proactive in using their own records to identify people who may be entitled and have not yet claimed and encourage them to put in a claim.
“A claim can be made over the phone and is a relatively simple process and I would encourage anyone who thinks they may be eligible to make a call to find out.”
A DWP spokesperson said: “We want to ensure pensioners receive all the support to which they are entitled and it is encouraging to see that take-up of Pension Credit increased in 2019/20, with the number of new claims 30% higher in 2021 compared to 2019.
“We continue to work with stakeholders and others to encourage those eligible for Pension Credit, and the wide range of other benefits it can provide, to make a claim.”
What is Pension Credit?
Pension credit is an income-related benefit aimed at people living in the UK over State Pension age.
It offers older people a weekly top-up to their income - you can also choose to be paid fortnightly or every four weeks.
It’s available to single pensioners, including widows and widowers, as well as couples.
To use the calculator, you’ll need details of:
earnings, benefits and pensions
savings and investments
You’ll need the same details for your partner if you have one.
Who cannot use the Pension Credit calculator?
You cannot use the calculator if you or your partner:
are deferring your State Pension
own more than one property
are self employed
have housing costs (such as service charges or Crown Tenant rent) which are neither mortgage repayments nor rent covered by Housing Benefit
How to make a claim
You can start your application up to four months before you reach State Pension age.
You can claim any time after you reach State Pension age but your claim can only be backdated for three months.
This means you can get up to three months of Pension Credit in your first payment if you were eligible during that time.
You will need:
your National Insurance number
information about your income, savings and investments
your bank account details, if you’re applying by phone or by post
If you’re backdating your claim, you’ll need details of your income, savings and investments on the date you want your claim to start.
Apply online
You can use the online service if:
you have already claimed your State Pension
there are no children or young people included in your claim
To check your entitlement, phone the Pension Credit helpline on 0800 99 1234 or use the GOV.UK Pension Credit calculator here to find out how much you could get.
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