Up to £2.5bn Pension Credit goes unclaimed by 950,000 eligible families

The DWP has published income-related benefits data, including Pension Credit, indicating that up to £2.5 billion of Pension Credit goes unclaimed by 950,000 eligible families.

The data showed that 62% of those entitled to Pension Credit received the benefit in the tax year 2023/24, down from 65% in 2023. The research showed that the number of eligible families not claiming the benefit was up from 760,000 a year earlier.

Clare Stinton, Head of Workplace Analysis at Hargreaves Lansdown said “Boosting Pension Credit take-up is proving a tough nut to crack. Despite a Government awareness campaign running since 2022, the number of eligible families missing out on this vital benefit has risen from 760,000 in 2022/23 to 950,000 in 2023/24.

“Government data reveals that take-up is highest among single men, with 67% of eligible men claiming Pension Credit, compared to 64% of women, and just 48% of couples. The take up rate for couples fell sharply from 59% in 2022/23 to 48% in 2023/24.

“Take-up is also higher among those under 75 (65%) compared with those over 75 (60%), suggesting older retirees may be missing out most. Pension credit is a hugely valuable and underclaimed benefit that not only tops up income, but also unlocks access to other support, including a free TV license for over 75s, as well as help with council tax.

“Eligible households who don’t claim are missing out on an average of £2,600 a year. This is money that could make a real difference to retirement income, especially at a time of stubbornly high inflation and higher living costs.

“There’s a chance this disappointing trend may be reversed in the tax year 2024/25, because early in the tax year, the government announced changes to the rules that meant only those receiving Pension Credit would get the Winter Fuel Payment. The U-turn to these plans came almost a year later, and in the interim there was a surge in applications. There’s every chance that some of this gap will have closed.

“If you have yet to claim and think you might be eligible, you can start an application up to four months before reaching State Pension age, and claims can be backdated by only three months so it’s important to apply as soon as possible. Anyone who thinks they or a loved one might qualify should check their eligibility and put in a claim.”

 Director of Policy & Influencing at Independent Age Morgan Vine said “Today’s Pension Credit figures are concerning, far too many older people on low incomes are still missing out on this vital financial support. In 2023/24, only 62% of eligible older people received Pension Credit, leaving a staggering 910,000 households without the support they are entitled to. This means an estimated £2.5 billion in Pension Credit wasn’t received, a sharp increase from £1.5 billion the previous year. It’s unacceptable that such vital support is failing to reach older people who need it most.

“Pension Credit can be truly transformative. It boosts income by over £4,000 a year and unlocks access to a wide range of additional entitlements, including free NHS dental care, the Warm Home Discount, and Housing Benefit to help with rent.

“While we welcome some of the new strategic approaches the UK Government is trialling, these statistics show action is needed more urgently than ever. We are calling on the UK Government to implement an all-entitlement take-up strategy that targets older people on low incomes and ensures they can access all the financial support they are entitled to.  Crucially, any effective strategy must simplify the application process. Our research shows that the current system is too complex, acting as a major barrier to access. Older people facing financial hardship shouldn’t be forced to navigate a confusing and time-consuming process just to receive money that has been set aside for them.”