Data from the Department for Work and Pensions (DWP) shows that an estimated 63% of people entitled to the benefit received it last year, this is down from 66% in 2020.
Pension credit gives you extra money to help with your living costs if you’re over State Pension age and on a low income.
The DWP figures show that 880,000 families who could have received pension credit haven’t claimed the benefit. Experts say this is particularly worrying as pension credit acts as a gateway to other benefits, such as free TV licence and cost-of-living payments.
Laura Suter, head of personal finance at AJ Bell, said: “Figures show the average household is missing out on around £2,200 of Government support. In total, it means that pensioners are leaving £2.1bn of money in the Government’s pocket that they could rightfully claim as theirs. On top of that, pensioners are also not claiming £1.3bn 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 Bell showing that the number of claims made in the 2022-23 tax year were more than double the previous year.
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“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.”
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “We saw a shock dip in pension credit take-up, with only 63% of families who are entitled to it actually claiming it. This is down from 66% back in 2020. However, the data notes that the pandemic did affect how information was gathered and this may well have affected the results. The fact remains though that hundreds of thousands of people who are struggling in retirement are not getting the help they need.”
How to claim pension credit
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.
Pension credit claims can 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.