There is a persistently low take-up of pension credit, new Government research shows, with around one million older people missing out.
Applications for the benefit were down 36 per cent in the past year, according to the Department for Work and Pensions (DWP), receiving 209,735 compared to 117,595 in the year previously.
Labour is encouraging people to sign up with pensions minister Torsten Bell telling The i Paper that “one phone call could transform someone’s retirement.”
Separate research from the Government shows that applying could be worth an average of £87 a week.
Bell, who has been in the position since January last year, said: “For years, I’ve been told this is just because of stigma – that older people don’t claim pension credit because pride is getting in the way.
“[But] the major barrier is simpler and more fixable as people don’t know it exists, or they’ve talked themselves out of applying based on misconceptions that aren’t true.”
What is pension credit?
Pension credit is a tax-free, means-tested benefit for people over state pension age, which is currently 66, on low incomes.
It is separate from the state pension and tops up weekly income to a guaranteed minimum level, set at £227.10 for single people and £346.60 for couples in 2025/26.
Yet up to one million pensioner families could be missing out on an average of £4,300 a year, official figures show. Around 910,000 eligible families are not claiming, leaving as much as £2.5bn unclaimed.
Bell argued that misunderstanding, not pride, is driving much of the gap.
He said: “Many assume that simply having savings, owning their home, or a partner’s income rules them out. It doesn’t. Others have simply never heard of pension credit at all.”
Research by the DWP found that confusion about eligibility was widespread.
Some people believed receiving attendance allowance automatically disqualified them, whilst others assumed the benefit was reserved for those who were seriously ill or in extreme hardship.
Among those entitled but not claiming, knowledge was sometimes virtually non-existent and even successful claimants often admitted they applied with little confidence, deciding simply to “give it a try”.
Bell added that it was easy to apply. “You can do it over the phone, claim online in around 16 minutes or by post. Many of the people in our research said they decided to just give it a try without fully knowing if they’d qualify. They did.
“If you’re reading this and you have an older relative living on a low income, that’s your cue. One conversation could be worth a lot: the average weekly award is £87 a week.”
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Pension credit benefits
Pension credit does more than increase weekly income as it unlocks help with housing costs, council tax, NHS treatment and dental care.
Entitlement can also trigger winter fuel support and even a free TV licence.
Awareness of these benefits was low, government research showed, yet for many claimants, especially those receiving smaller weekly top-ups, they made the greatest financial difference.
Bell warned: “Too many people only find out about these after they’ve claimed, or after they’ve lost them.
“That’s a problem, because awareness of those extra benefits turns out to be one of the things that actually motivates people to apply in the first place.”
How to claim pension credit
You can start your application up to four months before you reach the state pension age.
You can apply at any time after you reach this age, but your application can only be backdated by three months.
This means you can get up to three months of pension credit in your first payment if you were eligible during that time.
To apply, you can do so by post, phone or online. To find out more, click here.
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