New annual figures published this morning by DWP show an alarming drop in the proportion of younger pensioners claiming the Pension Credit to which they are entitled. Pension Credit acts as a ‘safety net’ benefit, ensuring that those who claim it are brought up to a minimum standard of living. It also acts as a ‘gateway’ to other benefits such as help with energy costs, extra payments during periods of cold weather and, for the over 75s, free TV licences.
The table below shows the percentage of people who were taking up their pension credit when the last figures were published (in 2020) and in the latest figures (for 2022), separately for those aged under and over 75.
Table 1: Take-up rate of Pension Credit in 2020 and 2022 (caseload)
| 2020 | 2022 | |
| Aged under 75 | 68% | 60% |
| Aged 75 or over | 65% | 65% |
| All pensioners | 66% | 63% |
The table shows that in 2020 just under 2 in 3 pensioners (66%) who were entitled to Pension Credit took up their entitlement. This had fallen to 63% by 2022. But the age breakdown shows this all relates to younger pensioners, where the take-up rate dropped sharply from 68% to 60%. By contrast, take-up amongst older pensioners held steady, perhaps because of increased focus on Pension Credit as a route to claiming free TV licences for the over 75s.
The following table shows what this means in terms of the amounts of money unclaimed:
Table 2: Amounts of Pension Credit unclaimed in 2020 and 2022
| 2020 | 2022 | |
| Aged under 75 | £640m | £890m |
| Aged 75 or over | £860m | £830m |
| All pensioners | £1,470 | £1,720m |
Note: subtotals do not sum to totals in original DWP statistics
Table 2 shows that the amount unclaimed has gone up by a quarter of a billion pounds (from £1.47bn to £1.72bn) and that all of this is due to a rise in non-take-up amongst those aged under 75.
Commenting, Steve Webb, partner at consultants LCP said:
“The drop in Pension Credit take-up is deeply worrying. Despite a range of publicity campaigns, the message is simply not getting through. Pension Credit is a vital way of ensuring that people in retirement have a decent minimum standard of living. It seems likely that the link between Pension Credit and free TV licences for older pensioners has helped to sustain levels of take-up in that group, but the drop amongst younger pensioners must prompt urgent action. Many of those who do not take-up pension credit will be known to the government, for example through claiming other benefits such as housing benefit. Systematic use of the data government already holds is the best way to tackle this problem rather than one-off publicity campaigns”.
