- Just six in 10 people who are entitled to pension credit claimed it in FY 2022
- The average household is missing out on around £2,200 of government support
- 880,000 families who could have received pension credit haven’t claimed the benefit
- Pensioners are also not claiming £1.3 billion of housing benefit that they are entitled to
- Pension credit acts as a gateway to other benefits, such as free TV licence and cost-of-living payments
- You can check your eligibility to claim pension credit online, over the phone or by post
Laura Suter, head of personal finance at AJ Bell, comments on the latest figures on pension credit take-up:
“The latest figures show that just six in 10 people who are entitled to pension credit actually claimed it last year, with hundreds of thousands of households potentially missing out on thousands of pounds of valuable extra income per year. Figures show the average household is missing out on around £2,200 of government support.
“The latest estimates from the government show that 880,000 families who could have received pension credit haven’t claimed the benefit, meaning many households are unnecessarily living on lower incomes than they need to. In total it means that pensioners are leaving £2.1 billion of money in the government’s pocket that they could rightfully claim as theirs. On top of that, pensioners are also not claiming £1.3 billion of housing benefit that they are entitled to, amounting to an additional £3,400 per year of potential support per household.
“The cost-of-living crisis has hurt many household’s budgets, but particularly pensioners, who tend to spend more of their money on heating and eating – which have seen some of the biggest surges in price. We know that more people are claiming pension credit, with an FOI by AJ Bellshowing that the number of claims made in the 2022-23 tax year were more than double the previous year.
“What’s more, pension credit is not just a valuable benefit in its own right – it also acts as a gateway to other benefits, such as help with heating costs and free TV licenses. And there is an extra incentive for pensioners to make a pension credit claim at the moment, as it means they are eligible for the next cost-of-living payment. The next payment of £299 won’t be made until Spring next year, but will provide a valuable additional boost to households.
“Pension credit claims can also be backdated by up to three months, meaning those who claim now could get an extra top-up in their first payment. But receiving the pension credit you are owed won’t happen automatically – it’s up to you to make a claim if you think you are eligible. You can check your eligibility to claim pension credit online, over the phone or by post. If you’re unsure how to go about completing your application, organisations like Age UK and Citizens Advice can help.”
Pension credit explained
Pension credit is a key benefit provided by the state which often tends to go unclaimed by lower income retirees.
In 2023/24, if you are over state pension age (66), single and your income is less than £201.05 a week then pension credit will top you up to that amount. For a couple, the combined income figure is £306.85.
In relation to pension credit, your income includes your state pension, other pensions, employment or self-employment earnings and most social security benefits. As with the state pension, it is up to you to claim pension credit.
For those who are entitled to receive it, claiming pension credit is also really important because it acts as a gateway to other benefits, such as help with heating costs, housing benefit, dental treatment and free TV licenses (if you are aged 75 or over).
In addition, those who claim pension credit currently qualify for cost-of-living payments from the government. To be eligible for the next cost-of-living payment, which is worth £299 and due to be paid in Spring next year, you must register for pension credit or other qualifying benefits – the government has not yet set the deadline for entitlement.