Nine peers in the House of Lords have asked for answers on what action the Government is taking to improve take-up rates of Pension Credit – an entitlement which is currently being missed out on by four in 10 eligible people.

The debate, held yesterday, was led by Lord Foulkes of Cumnock, who asked Parliamentary Under Secretary of State for Work and Pensions Baroness Stedman-Scott about the “increases, if any, in the uptake of Pension Credit in each of the past 12 months”.

The most recent uptake figures, released in February, revealed that 61% of those eligible for Pension Credit do not receive it - a figure that has remained stagnant for a decade. The Department for Work and Pensions earlier this year ran a 12-week awareness campaign on Pension Credit.  

Lord Foulkes noted that the campaign appeared to have had limited success in boosting claim rates, and called for a new action plan to be created, in consultation with Independent Age and other organisations.

“Would she therefore, and her colleagues, convene a meeting with the officer of the all-party group of older people, and most important of all, all the [ageing] charities, so that we can launch together a much more effective, powerful and imaginative campaign?” Lord Foulkes said.

Baroness Stedman-Scott committed to taking the question regarding a campaign and meeting with older people’s charities back to the DWP and promised a personal response.

A further eight peers asked additional questions regarding Pension Credit, including if there were plans for a written action plan, whether the DWP would consider auto-enrolment into Pension Credit, and if the Government would undertake further research into the reasons for the low take-up of the entitlement.

Baroness Stedman-Scott said there were no plans to introduce targets or conduct new research, and did not directly address whether the Government would look into auto-enrolment.

More than one million people who should be receiving Pension Credit miss out on it, with several billion pounds going unpaid each year. With a take-up rate of just 61%, it has the worst uptake of any national entitlement.

Deborah Alsina MBE, Chief Executive of Independent Age, said:

“The low take-up of Pension Credit is a vital and urgent issue to millions of older people, and we are pleased it is being given greater consideration by being raised today in the House of Lords.

“At Independent Age, we frequently hear about what a lifeline Pension Credit can be to people in later life, ensuring that they don’t have to choose between eating healthily and heating their home.

“We want to work with the Government to ensure that all people entitled to this money receive it.

“We are urgently calling on the Government to meet with us to discuss how we can work together to improve Pension Credit uptake. The UK needs a comprehensive written strategy setting out a clear commitment, and innovative action, to tackle this longstanding problem.”

Recent research by the Centre for Research in Social Policy at Loughborough University, commissioned by Independent Age, revealed that low Pension Credit uptake costs the NHS and social care systems an estimated £4 billion each year – significantly more than it would cost to pay everyone the Pension Credit to which they are entitled.

If Pension Credit take-up was boosted to 100%, almost 450,000 people could be lifted out of poverty.

- ENDS –

For media enquiries please contact: Gen Kennedy, Media and PR Manager, on 07849 641 286 or email: Gen.Kennedy@independentage.org

Notes to editor:

  • Independent Age’s Credit Where It’s Due campaign has been calling for the Government to do more to ensure that people in later life receive the Pension Credit that they’re entitled to since July 2019: https://www.independentage.org/campaigns/PensionCredit
  • The report mentioned above, The Cost of Pensioner Poverty and Non-Take-up of Pension Credit, calculates an estimate of the additional costs of spending on health and social care needed for pensioners whose lives have been damaged by poverty.
  • The report uses data from 2017-18 Family Resources Survey (FRS) to calculate the number of pensioners living below the median income line of 60%. It assumes that anyone not claiming who has below 60% median income is an eligible non-claimant of Pension Credit. This is 1.01 million pensioners. This is very close to the Department for Work and Pension’s own estimate of 1.06 million.
  • It then uses two methods to identify associations between lower income of this group and higher public costs:
  1. Surveys of pensioners that record both their incomes and their self-reported use of public services;
  2. Local area data which shows the extent to which having more people in an area on a means-tested benefit is associated with more recorded spending on public services in that area.
  • Using these two methods the authors have calculated the higher spending costs associated with primary health care, acute and community health care, and social care. The authors hypothesise that the survey-based estimates are likely to be conservative, while the area-based estimates are likely to be a high estimate. As such, they have arrived at a central estimate between the two totals.

Estimates of additional health and care spending associated with non-take-up of Pension Credit

Spending area

Acute and community health care

Primary health care

Social care

Total

 

Survey based estimates

£2,867m

£154m

£189m

£3,210m

Area based estimates

£4,497m

£313m

  £66m

£4,876m

Average

£3,682m

£248.5m

£127.5m

£4,043m

  • The report also uses the 2017-18 Family Resources Survey (FRS) to calculate how the incomes of eligible non-claimants would improve if they claimed Pension Credit and how this would affect pensioner poverty. It estimates pensioner poverty would fall by about a third (from 16.4% to 11.8%) if all eligible non-claimants were to claim. More severe pensioner poverty would fall to very low levels – from 9.0% to 4.3% of all pensioners below 50% median.
  • Pension Credit figures come from the Department for Work and Pensions statistics for between April 2017 and March 2018, released in February 2020.

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