Hundreds of thousands of pensioners in the UK are missing out on a critical financial benefit known as Pension Credit, leaving an estimated £1.7 billion in unclaimed funds. Designed to provide a financial safety net, Pension Credit could boost incomes by over £3,900 annually, helping older individuals navigate the challenges of rising living costs.
As the cost-of-living crisis continues to squeeze household budgets, financial experts are urging pensioners to check their eligibility. Many who qualify are unaware of the benefit or mistakenly believe they don’t meet the requirements.
A Financial Lifeline for Older People
The cost-of-living crisis has disproportionately affected older generations, particularly those on fixed incomes. With rising energy prices, high inflation, and increased costs for essentials such as food, many pensioners are struggling to make ends meet.
Fiona Peake, a finance expert at Ocean Finance, emphasised the importance of Pension Credit in offering immediate relief:
“The cost-of-living crisis has hit older people hard. Aside from immediate financial relief, claiming Pensions Credit can help protect you against rising costs.”
In addition to the direct financial boost, Pension Credit serves as a gateway to other support schemes, including Winter Fuel Payments, council tax reductions, and assistance with NHS costs.
Common Misconceptions About Pension Credit
Despite its benefits, Pension Credit remains one of the most underclaimed entitlements in the UK. According to the Department for Work and Pensions (DWP), around 850,000 pensioners who qualify have yet to claim it.
Many avoid applying due to misconceptions about the process or eligibility criteria. Fiona Peake addressed these concerns:
“Many people assume that claiming Pension Credit is a complicated process or that they won’t qualify because they have savings or a small private pension. In reality, it’s a straightforward process, and the rules are more generous than you might think.”
She urged pensioners and their families to take a few minutes to check eligibility:
“It’s always worth checking, even if you only receive a small amount of Pension Credit, it could unlock other support worth thousands of pounds.”
Eligibility and How to Claim
To determine if you qualify for Pension Credit, consider the following:
- You must be of state pension age (66 or older, born before 1958).
- Single pensioners with a weekly income under £218 are likely eligible.
- For couples, where both partners are of pension age, the threshold is £333 per week.
Pension Credit has two components:
- Guarantee Credit: Tops up your income to a minimum standard.
- Savings Credit: Provides additional benefits if you’ve saved for retirement.
Claiming is simple and can be done online, by phone, or by post.
The Bigger Picture: Unclaimed Benefits
The DWP estimates that £1.7 billion in Pension Credit is left unclaimed annually, representing a significant loss for pensioners who could benefit from the support. The implications extend beyond personal finances; unclaimed benefits mean fewer people accessing additional schemes tied to Pension Credit, such as:
- Winter Fuel Payments: Providing help with heating bills during colder months.
- Council Tax Reductions: Offering potential savings on local taxes.
- Free NHS Prescriptions: Covering essential medical costs.
- Housing Benefits: Supporting those who rent their homes.
Why Action is Urgent
With energy prices set to increase again in January and inflation showing little sign of easing, experts are calling for immediate action. Fiona Peake highlighted the urgency:
“With the energy price cap increasing once again at the start of January and food inflation remaining stubbornly high, claiming what you’re entitled to is a smart move.”
She added that families and caregivers should encourage older relatives to check their eligibility and apply without delay.
Simple Steps to Secure Pension Credit
Here’s how to ensure you or a loved one isn’t missing out:
- Check Eligibility: Use online tools or contact the Pension Credit helpline to verify if you qualify.
- Gather Documentation: Prepare details about income, savings, and pension contributions.
- Apply: Submit your application online, via phone, or through the post.
- Monitor Additional Benefits: Once approved, explore other schemes tied to Pension Credit for further support.
Those pensioners who are entitled to Pension credit should be identified by DWP. Many pensioners in the required age group are unfortunately unable for many reasons to submit a claim.