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About a million families are missing out on £1.8 billion of Pension Credit each year

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Pensioners with the smallest income in retirement are receiving the least in State Benefits, across nearly all types of cash benefits, new research from HUB Financial Solutions, the advisory firm, has found.

Analysis of ONS data splitting retired households into five groups by annual income shows the bottom quintile receives £8,833 a year on average in cash benefits including State Pension. That is £84 a week less than the £13,220 received by the second quintile and more than £100 a week less than the top quintile whose overall income is five-times higher.

Simon Gray, Managing Director at HUB Financial Solutions, said: “The findings challenge the notion that most State cash goes to the poorest pensioners – in fact it goes to those in the middle of the income scale.

Gray continues, “The characteristic of those retired people on the lowest incomes is that they receive less State Pension, perhaps because they did not achieve the qualifying years needed or missed out on additional pension such as State Earnings Related Pension Scheme (SERPS) or State Second Pension (S2P). They also have not managed to save or invest as much, either inside or outside private pensions which has also contributed to lower retirement incomes.”

Our concern is that these ‘property rich, income poor’ people may be put off checking their entitlement to benefits.

HUB Financial Solutions’ specially trained advisers check the benefits entitlements of all customers considering equity release and frequently find people are missing out. Four in 10 of these people who were entitled to benefits last year were not claiming anything and another two in 10 were claiming less than the full amount, with the average loss of income of £830 a year.

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