Interactive Investor

Four in 10 retirees miss out on crucial benefit

14th September 2020 14:28

Marc Shoffman from interactive investor


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Pension credit is available to top up retirement income, but many people are unaware or ashamed of claiming.

Four in 10 eligible retirees are missing out on vital government support in the form of pension credit, research shows.

Pension credit is a benefit that guarantees the income of a retiree can be topped up to at least £173.75 a week for singles and £265.20 for couples if it falls below this level.

The amount received depends on income and also opens access to other support, such as housing benefit and the warm homes discount scheme.

However, analysis by the Centre for Research in Social Policy at Loughborough University, commissioned by elderly charity Independent Age, found 40% of eligible pensioners fail to claim for it.

The research estimates that 1.06 million people aged 65 and over are currently missing out, equivalent to £2.8 billion going unclaimed every year.

Those not claiming risk being left on a “threadbare income” that can leave many with a choice between “heating and eating”, the report warns.

This can create diet and health issues and makes those on low incomes more likely to require services such as prescriptions or use of a hospital bed.

The resulting costs to the NHS and social care systems are estimated at between £3.02 billion and £4.81 billion per year.

The report concludes that if pension credit take-up increased from 61% to 100%, then almost 450,000 pensioners could be lifted out of poverty.

This would mean substantial savings for the NHS and social care systems over the long term.  

Independent Age says take-up is low due to a lack of awareness and stigma attached to claiming.

Deborah Alsina, chief executive of Independent Age, says: “Taxpayers are unnecessarily footing a health and social care bill of an estimated £4 billion, when if the government ensured older people received the £2.2 billion to which they’re entitled, many of these additional costs to our health and care systems would be alleviated. 

“The government needs to urgently create an action plan that contains high quality, up-to-date research into who is not claiming pension credit and why they are not receiving it.”

A spokesperson for the Department for Work and Pensions urged anyone who thinks they may be eligible for pension credit to visit

The spokesperson says: “We want to make sure that all older people receive the support they are entitled to and earlier this year we ran a nationwide campaign to raise awareness of pension credit, also dispelling some myths people might hold.

“Having savings, a pension or owning a home are not necessarily barriers to receiving pension credit and even a small award can provide access to a wide range of other benefits.”

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