The benefit 850,000 eligible families aren’t claiming

·4-min read
Shoppers wearing face masks outside a Sainsbury's store in south east London. Supermarkets are being called on to revert to more stringent in-store coronavirus measures with members of the public urged to respect regulations when out grocery shopping.
Three in 10 Britons eligible for pension credit are not claiming it according to figures from the Department for Work and Pensions. (PA)

Up to £1.7bn in pension credit is going unclaimed each year according to government estimates, with more than 850,000 families missing out.

Figures from the Department for Work and Pensions (DWP) reveal that three out of 10 Brits entitled to pension credit fail to claim. On average, this amounts to a loss of £1,900 per year for each family entitled to the benefit.

It comes as ministers plan a drive to encourage people to check what benefits they're eligible for amid the worsening cost-of-living crisis.

On Tuesday, Boris Johnson told his cabinet to come up with new and "innovative" ways to help Britons struggling with the cost of living without spending more taxpayer money.

Read more: Cost of living crisis: Six in 10 cutting back on essentials to make ends meet

Among ideas touted were proposals to change MOTs to once every two years instead of yearly, and long-term reforms to child care.

Earlier this month, the government launched a drive to try and increase uptake in pension credit.

"We recognise the challenges some pensioners will be facing with the cost of living which is why promoting pension credit is a priority," said pensions minister Guy Opperman.

Prime Minister Boris Johnson (left), alongside new Chancellor of the Exchequer Rishi Sunak (centre), and Work and Pensions Secretary Therese Coffey (right) during the first Cabinet meeting at 10 Downing Street, London, since the reshuffle.
Boris Johnson has ordered cabinet ministers to come up with cost-free 'innovative' ways to tackle the rising cost of living. (PA)

"That’s why we’re calling on everyone with retired family, friends and loved ones to check in with them and see if they can get this extra financial support."

Pension credit is the main means-tested benefit for pensioners.

If a person is over state pension age, on a low income, and lives in the UK they may qualify for pension credit. The benefit comes in two parts:

  • Guarantee credit tops up weekly income to a minimum level, meaning those eligible could be entitled to £182.60 if they are single, or £278.70 if they are in a couple.

  • Savings credit additional money if a person has savings, or income is higher than the basic state pension, for people who reached the state pension age before 6 April 2016. This could amount to to £14.48 for a single person, and £16.20 extra per week for a couple.

The DWP has also stressed that many pensioners are eligible for other benefits, such as help with housing costs, council tax, heating bills and a free TV licence.

Read more: Cost of living crisis: The everyday food items that are soaring in price

In addition, up to 260,000 pensioners entitled to the relevant housing benefit did not claim it – resulting in up to £1.1bn worth of support unclaimed. On average, this amounted to a loss of about £4,000 per year for each family.

Labour have criticised the government over its support for pensioners after its analysis found two million pensioners don’t have enough savings to pay for this year’s steep rise in energy costs.

On 1 April energy bills soared by £693 a year on average after Ofgem hiked the energy bill price cap by 54% due to rises in the cost of wholesale gas.

British Chancellor of the Exchequer Rishi Sunak leaves Downing Street on the day of the Spring Statement, in London, Britain, March 23, 2022. REUTERS/Peter Cziborra
The Treasury has ruled out increasing benefits in line with inflation despite experts saying it is the best way to start to help those on the lowest incomes. (Reuters)

“The simple truth is Boris Johnson has betrayed Britain’s retirees," said Jonathan Ashworth, shadow work and pensions secretary.

“Not only have the Conservatives just imposed the biggest real terms cut to the state pension in 50 years, but they’ve done little to help the two million pensioners left high and dry without adequate savings who are now struggling with rocketing heating bills."

On Monday, Age UK warned the financial situation facing pensioners was "terrifying".

Read more: Cost of living: UK households face ‘major recession’ as crisis escalates

“Roaring inflation means this is shaping up to be the year from hell for anyone on a low fixed income," said Caroline Abrahams, director at the charity.

“However frugal they are, many older people are already struggling to make their pension stretch to cover the basics and the forecast it’s going to get even worse is truly frightening.”

The Trussell Trust, one of the UK's largest food bank networks, on Wednesday revealed they handed out more than 2 million food parcels for the second year ever in 2021/2022.

Watch: Cost of living crisis: The pensioners forced to use food banks and turn off their central heating