Changes to TV Licences
The BBC s decision to link the over 75s free TV licences to receipt of Pension Credit will deepen the poverty of hundreds of thousands of the poorest pensioners. They are the over 75s who could claim Pension Credit but do not. That leaves them with an income usually well below £200 a week out of which they will have to find the cost of the TV licence. By 1 June 2020 when the change begins, that will have risen with inflation from £154.50 to around £158. For many it will be more than a week’s money. The average amount unclaimed by those over 75 in 2016/17 was £49 a week. If that has now risen to, say, £50 that implies the average income of those non-claimers is just £117.25 a week.
The BBC hopes that the change will encourage them to claim Pension Credit. That really is the triumph of hope over experience.
Four out of ten pensioners who could claim Pension Credit do not do so. It has one of the worst take up rates of any means-tested benefit.
Successive governments have tried to get more to claim. But in fact take up rates have fallen from 65% in 2004/05 to 60% in 2016/17. In 2008 a DWP policy paper said “despite significant campaigns to encourage take-up of Pension Credit, the number of customers responding to such campaigns has reduced over time….it would not represent value for money to repeatedly press unwilling eligible people to take up their entitlement.”
That sets the context of Independent Age’s excellent challenge to the Government to raise take up of Pension Credit above the current desultory 60%.
The role of technology
The BBC seems confident that the over 75s who do get Pension Credit (almost 950,000), will be “likely to apply to qualify from June 2020.” But there is no guarantee that all will do so. My suggestion for them is simple. Use the same model the energy companies employ to get the £140 Warm Home Discount to people on the guarantee element of Pension Credit. They match their data with that of DWP to produce a list of those who are entitled. TV Licensing has details of all those currently getting a free licence and the date of birth and NI number of the person who qualifies. They could match that data with DWP records to give the free licence automatically.
Finding up to 730,000 people who could claim, but do not, is more difficult.
But with the extraordinary amounts of data available now compared with 2009 it should be possible to begin to identify people who are likely to qualify. For example it could exclude from its list of those who currently get a free TV Licence all those who pay tax – using HMRC records – which now starts at £12,500 a year. Now £240 a week is well above the qualifying level for Pension Credit which, for a single person cannot exceed £200 this year.
Pension poverty – a hidden issue
The licence fee change simply draws attention to the dreadful way we treat the poorest pensioners.
Many young people are surprised there even are poor pensioners. All they hear is that pensioners own £1 trillion of housing wealth and have gold plated pensions – two things that most young people can only dream of.
Of course on average today’s pensioners are a lot better off than when I first worked for Age Concern in the 1970s. Then our biggest concern was pensioner poverty not intergenerational fairness. No-one doubted that pensioners were poor and badly treated and more should be done.
Since then that aim has become policy of all political parties, from the introduction of above inflation rises in the state pension by the last Labour government, through the introduction of the New State Pension by the Coalition government to the confirmation of the triple lock state pension rise by the present Government. As a result incomes of pensioners have risen and so has the level of means-tested support – which has also generally been protected from the cuts and freezes which have affected people under working age.
Of course there have been losers – the millions of women who have had their State Pension Age raised from 60 to 65 and in future to 66 or 67. That has also deprived thousands of both men and women of Pension Credit as the qualifying age for both rose with women’s state pension age from 60 to around 65 today.
So if anyone tells you the numbers claiming Pension Credit are falling that is why! Not because pensioner poverty is diminishing.
Falling numbers cannot hide the fact that the need is still there. The average Pension Credit payment is £57 a week, more than £3,000 a year paid to 1.7 million people who need it. Take up of only 60% implies there are more than a million more who could claim but do not, saving the government more than £3.5 billion a year.
That is why we need a serious campaign to get that money to those who are entitled to it and, of course, who urgently need it.
Paul Lewis is an award winning financial journalist and presenter of BBC Radio 4’s Money Box.
Have you been affected by any of these issues?
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The views and opinions expressed in this article are those of the author and do not necessarily reflect the policy or position of Independent Age