In the last year, there was a 75% rise in the number of pension credits being paid.
There were 143,031 pension credit claims paid out in the 2022-2023 tax year, compared to 81,519 the previous year.
The figures for the 2023 -2024 tax year are also expected to be higher again, as between April and September 71,590 claims have already been paid out, according to a freedom of information (FOI) request made to the Department for Work and Pensions (DWP) by the investment firm Quilter.
Pension Credit tops up a person’s weekly income to a minimum of £201.05 for a single person and £306.85 for couples. It is worth more than £3,500 a year on average and more money is available for those with disabilities or caring responsibilities.
The rise in claims is partly because of a Government campaign which encouraged pensioners to check if they were eligible for the benefit. They were also encouraged to check if they could get help with other costs including housing, council tax, and heating bills.
Anyone receiving pension credit may also be eligible for the Government’s £300 cost-of-living payments.
Increase of 231% in claims being rejected
There was also a huge spike in the number of pension credit claims that were rejected by the Government.
In 2022-2023, 95,515 claims were rejected, a 231% rise on the previous year, suggesting that many people are still unsure how this benefit works and who is eligible for it.
Quilter said some of the reasons for claims being rejected were a person having too much income, not being a UK resident, not providing all the information needed, not being the right age, or not claiming in time.
Pension credit is calculated by looking at a person’s income. If they have £10,000 or less in savings and investments this does not impact their claim for pension credit. But every £500 they have over £10,000 counts as £1 income per week.
If a claim has been rejected, it’s free to ask the Pension Service to review the decision.
‘Hundreds of thousands of pensioners’ able to claim but not doing so
Jon Greer, head of retirement policy at Quilter, said: “It is very encouraging to see so many more people being awarded with Pension Credits and especially at times like these as any increases to a pensioner’s income can be transformational to their quality of life.
“Unfortunately, so many people are either unaware of these credits or simply don’t realise they would be eligible for them and despite this increase in the number of awards, there will still be hundreds of thousands of pensioners able to claim but not doing so.
“What is clear is that major Government-backed campaigns like the one mounted over the past couple of years can have a huge impact on awareness, but risk being forgotten over time.
“A system of automatically awarding benefits, based on other data the DWP holds, would appear to be a simple answer but, in practicality, is unrealistic given the data for some benefits isn’t the same as used for others. That said, existing data could help target those who may be more likely to be entitled who could then be subject to a more targeted approach.”
