Two thousand people are to receive letters inviting them to apply for support which could top up their pension income, as part of a trial.
The Department for Work and Pensions’ “invitation to claim” trial targets those likely to be eligible for pension credit, being aimed at people who are above state pension age and in receipt of housing benefit.
Some people could see their income boosted thousands of pounds by making a successful claim – with the average pension credit award being worth more than £3,500 per year.
Letters and “call to action” leaflets will be sent out in two waves, starting this week, with a follow-up letter to be sent out in August.
They will be targeted at households in 10 local authorities, where people are already receiving housing benefit but not claiming pension credit.
Those under pension age can also help by checking in with older loved ones and asking them to consider if they could be eligible for this extra financial support— Pensions minister Laura Trott
Pension credit can lead to further support, including extra cost-of-living payments later this year.
It is designed to help with daily living costs for people over state pension age and on a low income, though they do not need to be receiving the state pension to get it.
The benefit, received by nearly 1.4 million pensioners across Britain, tops up someone’s income to a minimum of £201.05 per week for single pensioners and to £306.85 for couples, or potentially more if someone has a disability or caring responsibilities.
Even a small pension credit award can open doors to other benefits, including help with housing costs, council tax and heating bills.
Pensions minister Laura Trott said: “We recognise the challenges some pensioners will be facing with the cost of living, which is why we are easing those pressures with measures like pension credit, alongside driving down inflation.
“Pension credit take-up is at the highest level since 2010, and this trial will help us test even more ways to ensure pensioners are receiving all the support they can.
“Those under pension age can also help by checking in with older loved ones and asking them to consider if they could be eligible for this extra financial support.”
Previous estimates published on the website gov.uk, covering the financial year 2019/20, indicated that up to 850,000 families who were entitled to receive pension credit did not claim the benefit and up to £1.7 billion of available pension credit went unclaimed, averaging about £1,900 per year for each family entitled to receive pension credit who did not claim.
Pension credit can be claimed by phone and online, and an online calculator can help pensioners check if they are likely to be eligible and get an estimate of what they may receive.
The 10 local authorities chosen for the invitation to claim trial are Eastbourne, Teignbridge, Pendle, Charnwood, Vale of White Horse, Redcar and Cleveland, Craven, Harrow, Powys, and West Lothian.
A pension credit “week of action” in June saw the department joining forces with charities and other organisations to encourage people to see if they could be eligible and apply.
Applications for pension credit can be made on the how to claim page, over the phone by calling 0800 99 1234, or by printing out and filling in a paper application form.
If the trial is successful, the Government must work rapidly to expand it across the entire country— Tom Selby, AJ Bell
Tom Selby, head of retirement policy at investment company AJ Bell, said: “If the trial is successful, the Government must work rapidly to expand it across the entire country. However, the Government could and should do more.”
He added: “Administrative snarl-ups shouldn’t stop pensioners from getting the help they need as quickly as they could.
“The Government also needs to keep striving to make sure people are clear about when they can claim, myths are dispelled, and the claim process is as simple as possible.”
Sir Steve Webb, a former pensions minister who is now a partner at consultants LCP (Lane Clark & Peacock) said: “A significant number of people who miss out on pension credit are actually already providing information about their income and needs to their local council to support a housing benefit claim.
“In an ideal world, this information would be used automatically to assess any entitlement to pension credit. But until this happens systematically, it is good to see DWP (the Department for Work and Pensions) testing out whether writing to pensioners on housing benefit and encouraging a pension credit claim will improve matters.
“There will still be barriers to claiming, including public suspicion of unsolicited letters offering them money, but hopefully recipients will investigate further and then put in a claim.”
Alice Guy, head of pensions and savings at interactive investor, said: “This is great news for poorer pensioners who are currently struggling to make ends meet and could be eligible for more help from the Government.”
