On Thursday 27th April, national older people’s charity Independent Age delivered an overdue invoice for over £1.1bn to the government, to highlight the massive amount of Pension Credit that’s still going unclaimed. The charity has calculated that the amount of money that has been set aside for older people on a low income is large enough to pay the annual average energy bills for 454,000 UK households. The invoice was handed in alongside an open letter to Work & Pension Secretary Mel Stride, signed by more than 3,500 people. In the letter, the charity calls on the government to support older people struggling to make ends meet by publishing and delivering a Pension Credit uptake strategy. They say this needs to outline a sustained and strategic approach to reducing the amount of eligible older people missing out on the entitlement.
The latest Pension Credit uptake figures released by the government were produced for 2019/20 and are hugely out of date. These showed there were up to 850,000 eligible people missing out on the benefit. Since then, the government has taken steps to get Pension Credit to more people, such as conducting national awareness campaigns, and as a result, more older people are receiving the financial support. However, without firm evidence and up to date figures on Pension Credit uptake, it’s impossible to tell exactly how many eligible people are still missing out.
Independent Age estimates the figure is likely to be staggeringly high at around 590,000, meaning more than £1.1bn is still not being received by those living on low incomes.
Pension Credit is an important lifeline for many people in later life and is more vital than ever as the cost of living remains high. The entitlement tops up income and opens the door to many other life-changing benefits, including free NHS dental treatment and Council Tax discounts. Despite having the potential to transform lives, Pension Credit has one of the worst uptakes of all the state benefits.
Morgan Vine, Head of Policy and Influencing at Independent Age said:
“The government has made a good start on efforts to increase Pension Credit uptake. However, the number of new claims is unlikely to touch the sides when it comes to those still missing out. Our own analysis shows that far too many eligible people are likely to be still not receiving this vital support. This is having a detrimental impact on the lives of people across Great Britain. Our helpline regularly receives calls from anxious older people who are being forced to make decisions that can have a serious impact on their mental and physical health. Our advisers have spoken to people sitting in the dark to save money on electricity while others reduce the number of times they wash each week or skip meals.
“It’s unacceptable that still such a large sum of money is sitting there unused, especially as some essential costs, such as food, continue to increase sharply. A bold Pension Credit uptake strategy is urgently needed to get this money into the pockets of those that need it the most. Allowing this situation to continue would be a dereliction of duty by the government.”
Not receiving Pension Credit last year could have cost an individual up to £12,191. That’s because the entitlement not only tops up income, but also provides access to other important financial entitlements. In addition, Pension Credit is also the gateway to receiving the income related cost of living payments. These are designed to support older people on low or modest incomes during this turbulent period of high costs. In 2023/24 these payments will be worth £900, but if older people don’t receive Pension Credit, they’ll miss out on this vital support too. Time is also running out for eligible older to receive the first of these payments worth £301. The charity is urging all people in later life that are struggling now to check their eligibility before the 19th May deadline.
Thabani Sithole, 73, from Streatham, explains how Pension Credit changed her life.
“Before I started claiming Pension Credit, it was a desperate, desperate time. It was a constant struggle - where to get food from, gas and electric bills going up and paying council tax too. I was comfortable before the pandemic, but my work dried up and my small private pension dwindled, leaving me with just my state pension. My house was very cold so I had to wear extra clothes and cover myself in a blanket. At one point they were even threatening to repossess my home. I think I would have been homeless without Pension Credit, it really changed my life. Now I feel like a normal person with a bright future ahead of me.“
Notes to editor
454,000 average household figure was worked out by dividing estimated unclaimed Pension Credit figure, £1.135bn, by current Energy Price Guarantee figure, £2500 per household.
According to the latest published Government statistics on Pension Credit uptake, the overall uptake rate was 66% in 2019/20. We have assumed, for the sake of illustration, that the uptake rate in 2022/23 had increased and was 70%.
Applying this 70% rate to the caseload (i.e. the caseload number represents 70% of the total eligible) gives an estimated 589,819 people who in 2022/23 were eligible for Pension Credit but not receiving it.
According to the latest published Government statistics on Pension Credit uptake, the average amount going unclaimed by people eligible for Pension Credit was £37 per week, which is equivalent to £1,924 per year.
£1,924 per year x 589,819 people = £1.135bn
Not receiving Pension Credit last year could have cost an individual up to £12,191.
This figure is an estimated maximum for a combination of benefits/support linked to Pension Credit that someone eligible for but missing out on Pension Credit could also be missing out on.
Here are the figures for the different elements, which relate to 2022/23:
- Pension Credit (directly) – £3,300
- Housing Benefit – £5,587.99
- Council Tax Support – £1,816
- Warm Home Discount – £150
- TV licence (for those aged 75 and over) – £159
- NHS vouchers for glasses and lenses – £219.80
- Free NHS dental treatment – £282.80
- Cold Weather Payment – £25
- Cost of living payments – £650
- TOTAL = £12,190.59