Pensioners are missing out on £2.8bn Over 1.5 million people don't claim pension credit

04 March 2012

Pension credit should top up your income to £137.35 a week- if you claim it.

Britain's most vulnerable pensioners could be missing out on £2.8bn by not claiming Pension Credits, according to the Department for Work and Pensions (DWP).

Pensions Minister, Steve Webb, admits he is 'very concerned' as UK's means-tested benefit system continues to fails the most vulnerable elderly. Pension Credit could eventually be replaced by a new flat-rate state pension. 

Pension top-up goes unclaimed

Pension Credit is a means-tested benefit paid to pensioners whose retirement income is less than a minimum amount. For 2011-12 this is £137.35 a week for a single person and £209.79 for a married or Civil couple. In April 2012 the minimum guarantee rises to £142.70 for a single person, £217.90 for a couple.

Pension Credit is not paid automatically, however. It only goes to those who claim it. Many elderly people don't realise they are eligible, or fail to claim it for other reasons. 

Age UK director general Michelle Mitchell said: 'It is very disappointing that there has been no progress in older people not claiming the benefits they are owed. There are still 1.8 million people in later life living in poverty and claiming pension credit can make a huge difference to someone's income and quality of life. 

'The Government needs to start an awareness programme and move more towards a system where the DWP pay entitlements rather than an individual having to work their way through the benefits maze.'

Government plans state pension reforms

The Pensions Minister, Steve Webb, acknowledged the need for change: 'The goal is for people to retire on decent income, which is why we are bringing in automatic enrolment and have consulted on proposals to reform the system to provide a simple state pension set above the level of the basic means test.' 

The idea of a flat-rate state pension was mentioned by George Osborne in his 2011 Budget speech and has been championed by the Works and Pensions Secretary, Iain Duncan Smith. 

At the moment, basic state pension is £102.15 a week. In April 2012 it will rise to £107.45. Pension Credit gives a minimum income of £137.35 (£142.70 in 2012-13). 

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