From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

    Pension Credit take-up campaign is very timely as pensioner poverty is rising

    Pension Credit take-up campaign is very timely as pensioner poverty is rising

    • Delighted to see another campaign trying to help poorest pensioners claim the money they need and are entitled to by improving Pension Credit take-up.
    • Pension Credit (which could be re-named ‘Pensioner Top-up’) has lowest take-up of all means-tested benefits, with over a third of those entitled failing to claim since 2010.
    • Official figures suggest unclaimed Pension Credit means pensioner households missing out on an average £1600 a year.
    • As inflation soars, this failure will increase pensioner poverty from last year’s 2 million people.

    Pension Credit take-up is lowest of all means-tested benefits: Since 2010, more than a third of those entitled have failed to claim, remaining consistently around this level despite Government efforts to improve take-up.  Over 90% of the income of the poorest pensioners comes from State support, so those who don’t receive all the money they are entitled to will struggle to make ends meet – and even more so now amidst of the cost of living crisis.

    There are many reasons why pensioners do not claim:  Pensioners are notoriously reluctant to ask for what they see as ‘handouts’ but the low take-up is also impacted by factors such as not knowing what Pension Credit is, the complexity of the rules, form-filling aversion, pride, reluctance to divulge information and many pensioners wrongly believe they are not eligible. They don’t realise they can have up to £10,000 in savings and still claim small amounts of Pension Credit.

    Even small Pension Credit sums can open the door to other valuable benefits, worth thousands of pounds a year:  Pensioners receiving Pension Credit are then eligible for other help, including a £140 warm homes discount, additional money for carers, help with council tax, dental or other health treatments and free TV licences for over 75s. Official figures suggest unclaimed Pension Credit means pensioner households missing out on an average £1600 a year.

    The name ‘Pension Credit’ is not well understood – perhaps calling it a ‘Pensioner Top-Up’ would have more resonance:  Many pensioners who live alone, especially elderly women who are not online and have perhaps become even more isolated over the past couple of years due to the pandemic, do not know what Pension Credit is and don’t realise how much money they are missing out on. This will lead to more pensioners in poverty, which will cause serious hardship as food and heating bills have gone through the roof, but benefits have not kept up. Basic essentials such as food and energy, which have risen more than other goods, tend to comprise a larger proportion of pensioner spending than for younger groups.

    I’m delighted to see another campaign aimed at boosting take-up for poorest pensioners: It is time to take the issue of pensioner poverty more seriously. In 21st Century Britain, there should not be hundreds of thousands of older citizens living in poverty unnecessarily.  I hope this campaign will finally help boost take-up, so that all pensioners can be supported in the way they need for a decent lifestyle.  If you know any older people, relatives, friends or neighbours, who might benefit from this ‘Pensioner Top-Up’ please help them find out more.

    Last year, over 2.1 million pensioners were reported to be in poverty, up from 1.6 million a few years ago: The worst affected groups are single pensioners, over 80s, those in social rented housing or from Black and Asian backgrounds.   ONS data show numbers of pensioners, in different categories of age, housing tenure and ethnic background, who were living on less than 70% of median income, after housing costs.  Just over a quarter (27%) of all pensioners are in this category, but single pensioners (36%), the oldest pensioners (31% of over 80s), tenants in private rented accommodation (51%) and tenants in rented social housing (53%).  Ethnic background is also a major factor, with those from Black, Asian and Indian backgrounds seeing around 40% living on less than 70% of median income, and 53% for Pakistani origin pensioners.  More detail is shown below and full data is here: https://www.gov.uk/government/statistics/households-below-average-income-for-financial-years-ending-1995-to-2020

    Category of pensioner % living on below 70% of median income After Housing Costs Number of pensioners –
    ALL PENSIONERS 27% 11.6 million
    Single pensioners 36% 4.5 million
    Age 80+ 31% 3 million
    Owner occupiers 22% 9.4 million
    Tenants in private sector 51% 0.6 million
    Tenants in social rented sector 53% 1.6 million
    White ethnic background 26% 11.2 million
    Asian/Asian British 44% 0.3 million
    Indian 41% 0.2 million
    Pakistani 53% 0.1 million
    Black/Caribbean/African/Black British 39% 0.1 million

    Pension Credit can be claimed by phone, by post, or online:  The Pension Credit phone line is 0800 99 1234, or friends or family can help apply by post or online.

    Well done to Henry Tapper and Gareth Evans for another campaign to help the poorest pensioners.

    One thought on “Pension Credit take-up campaign is very timely as pensioner poverty is rising

    1. I have a small occupational pension £381.20 a month I live in rented accommodation that increases ever year. I have my state pension. But I do not qualify for pension credit. I receive housing benefits. And have to pay £12.40 a month income tax. So it doesn’t make any sense to me.

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