“Deeply worrying” is how one money expert has described households in England, Scotland and Wales missing out on more than £2,500 a year in pension credits, following a Department for Work & Pensions report published today.
In 2023-2024, 32% of potentially eligible households were missing out on claiming more than £50 per week in pension credits, the report found.
It revealed the Pension Credit receipt-rate was highest (86%) amongst households entitled to more than £150 per week and lowest (30%) for households entitled to less than £5 per week.
This suggests that as the weekly eligible amount of Pension Credit increases, the receipt-rate increases.
Across the three countries of Great Britain, Scotland was found to have the highest receipt-rate at 67%, followed by Wales with 64% and England with 63%.
The report identified a “tipping point” of £15 per week in pension credits. £15 is the amount after which the number of eligible households in receipt exceeds the number of potentially eligible households.
Up until weekly eligible amounts of £15, the number of potentially eligible households is greater than the number of eligible households in receipt.
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said: “It’s deeply worrying that nearly a third of eligible pensioners are missing out on money that could make a real difference to their weekly budget. £50 a week might not sound like much, but over a year that’s more than £2,500, enough to ease pressure on essentials or help cover rising energy costs.
“Many simply don’t realise they qualify, especially if they own their home or have small savings. Better awareness and simpler claims could go a long way to ensuring older people receive the support they’re entitled to.”
Laura Purkess, Personal Finance Expert at Investing Insiders, said pension credits have always been vastly under-claimed for a number of reasons.
She continued: “The biggest barrier to take-up — despite a huge engagement push — is simply a lack of awareness, and that’s a major problem with anything where you have to apply rather than it being administered automatically.
“Even where people have heard of it, the application process itself is another major barrier. It requires proving financial information, and some elderly people find this daunting, or may never have managed their own finances and so don’t have the necessary information to hand.
“The welfare system in this country is generally overcomplicated and the result is thousands of people who qualify for help not getting it.
“We need to make these processes regarding pension credits as simple as possible, with plenty of help on hand, and further engagement is essential to ensure people aren’t needlessly struggling in retirement.”
The report is published at a time when roughly half of Brits are sleepwalking into a retirement crisis.
Photo by ayumi kubo on Unsplash
