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

  • pensionsandsavings.com

    Reducing pensioner poverty – over 2 million poor pensioners need encouragement to claim Pension Credit

    Reducing pensioner poverty – over 2 million poor pensioners need encouragement to claim Pension Credit

    • Worrying rise in number of pensioners living in poverty.  
    • Poverty particularly acute for oldest and single pensioners, those in social rented housing and those from black and Asian backgrounds. 
    • Yet official figures show £1.6billion Pension Credit is going unclaimed each year with nearly a million pensioner households missing out on an average £1600 a year.
    • Delighted to see AgeUK, Len Goodman and Rustie Lee joining calls to improve Pension Credit take-up, which has been stuck at 40% since 2010.

    Worrying to see pensioner poverty rising to over two million: Recent figures analysed by AgeUK charity show a worrying increase in the number of UK pensioners living in poverty.  After the disruption to their lives caused by the pandemic, the added problem of low incomes and isolation has blighted their lives and now is a great time to help address this. 2.1 million pensioners are in poverty, up from 1.6 million a few years ago.

    Worst affected are single pensioners, over 80s, those in social rented housing or from Black and Asian backgrounds:   The figures below from ONS data show numbers of pensioners, in different categories of age, housing tenure and ethnic background, who are 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


    Huge sums spent on working age people in the pandemic, but £1.6billion Pension Credit is not being claimed: Workers and businesses have rightly received Government furlough money to help them afford to live during the pandemic.  However, pensioners have continued to miss out on money they are entitled to, because they do not claim Pension Credit.

    Pension Credit take-up is lowest of all means-tested benefits – 40% do not claim:  Official figures show that over 90% of the income of the poorest pensioners comes from State support.  Unfortunately, however, too many groups are not receiving the Government payments as they fail to claim.  Take-up of Pension Credit has been only around 60% since 2010 and Government efforts to improve take-up have not helped.

    Barriers to take-up include complexity, form-filling aversion, reluctance to divulge information, pride and lack of recognition of amounts available: It is well-known that pensioners find form-filling off-putting, are often too proud to apply for help, or wrongly believe they are not eligible.  They may not realise that they could have up to £10,000 in savings, but still be eligible for small amounts of Pension Credit and these can lead them to be entitled to many other valuable benefits, worth thousands of pounds a year.

    Pension Credit guarantees single pensioners at least £9,000 plus extra help for housing, heating, council tax, health costs and other bills too:  Pension Credit itself tops up single pensioners’ incomes to at least £173.75 a week and to £265.30 for couples. Those who do not claim just a couple of pounds a week in Pension Credit may also lose out on the extra benefits, including £140 warm homes discount, additional money for carers, council tax, dental or other health treatments even TV licences for over 75s.

    Great to see AgeUK working on this to spread the word and I encourage everyone who knows older people to suggest they check their eligibility:  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 AgeUK, Len Goodman and Rustie Lee for highlighting the issue.

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