£2.5bn of pension credit unclaimed - DWP

Over a third (40 per cent) of those entitled to pension credit have failed to claim the benefit, with up to £2.5bn unclaimed, new government statistics have revealed.

New statistics from the Department for Work and Pensions (DWP) have shown that 30 per cent of the available credit was unclaimed, with families who are entitled but fail to claim missing out on around £2,000 a year.

The take-up rate of pension credits has shown little movement over the last few years, with an estimated 61 per cent of qualifying families receiving the benefit in 2017/18, the same as seen in 2016/17.

However, the amount claimed through pension credit had risen by approximately 5 percentage points.

The report noted that this implied that those who weren’t taking up pension credit may only be eligible for smaller amounts.

The statistics also showed that the take-up of guarantee credit had remained “significantly” higher than that of savings credit, at 68 per cent compared to just 42 per cent.

The DWP highlighted that this could be driven by the difference in the average weekly amounts people were entitled to, with the average weekly amount for guarantee credit (£59) “substantially higher” than savings credit (£7).

Take-up was lowest amongst couples (55 per cent), whilst the take-up rate amongst single men slightly outpaced that of single women, at 67 per cent compared to 62 per cent.

Claims amongst those under 75 years old were also slightly higher than those aged 75 or over, however, this the report noted that “this has generally been the story”, with a limited difference between the age bands.

Commenting on the findings, Royal London pension specialist, Helen Morrissey, said: “Today’s data shows how timely the government’s campaign to boost Pension Credit is. For too long take up of this valuable benefit has remained stubbornly low at around 60 per cent.

"Given that it acts as a valuable boost to the income of the poorest pensioners and acts as a gateway to other valuable benefits we need to see urgent action to increase take up and improve the lives of over 1 million pensioners.”

Just Group group communications director, Stephen Lowe, added: “We like to think that state benefits reach those who need them most, but this is clearly not the case with pension credit.

"The 15 per cent of pensioners who are eligible for Guaranteed Pension Credit but failing to claim are missing out on almost £1,700 a year per household on average, while those 79 per cent failing to claim Savings Pension Credit are losing £453".

JRF's annual report on UK poverty also recently revealed that pensioner poverty had begun to increase, with 2 million pensioners currently in poverty.

Lowe added: "With many pensioners struggling to make ends meet, this should be a wake-up call for everybody to check their own eligibility. In the world of often-complex decisions about finances in retirement, this is one simple thing which could hugely benefit retirees.

“This reiterates the need for Pension Wise to include guidance on state benefits in the information they offer.”

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