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Common retirement freebie values dwarfed by lesser known £3k Pension Credit

Paloma Kubiak
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Paloma Kubiak

Over-65s in the UK know a lot when it comes to freebies available in retirement, but they know far less about the more valuable benefits they may be entitled to such as Pension Credit, worth an average £3,300 a year.

The majority of over-65s in the UK know they’re entitled to a free bus pass (95%) worth an average £23.20 a week, while an equal number know they can get free prescriptions worth £2.08 a week (season ticket).

Meanwhile, 86% are aware of the free TV licence for some retirees worth £3.06 a week.

However, according to the Just Group state benefits index, while there is a near-universal knowledge about these popular freebies, a quarter are in the dark on Pension Credit – a much more valuable benefit which helps pensioners on lower incomes.

Just Group revealed that the average annual Pension Credit payment could pay your medical prescription season ticket 31 times over, while the annual value of the higher rate Attendance Allowance could fund more than 30 yearly TV licences.

Nearly £2bn in Pension Credit left unclaimed

The retirement specialist said Pension Credit is worth more than £65 a week on average, topping up weekly incomes to £182.60.

An estimated 1.4 million pensioners are eligible for Pension Credit, but around £1.7bn is left unclaimed every year, worth an average of £3,300 per household, according to Government statistics.

Elsewhere, Attendance Allowance and Disability Living Allowance were even less well known among over 65s, despite the higher bands of each benefit being worth £92.40 a week, or £4,804.80 a year.

One in five (19%) also said they did not know about Housing Benefit which helps with rent payments.

The table below shows the level of awareness of more valuable benefits:

‘Significant financial loss from not claiming these benefits’

Stephen Lowe, group communications director at Just Group, said the figures demonstrated that pensioners needed to ensure they did not miss out on benefit entitlements when approaching retirement.

“The social and cultural references to ‘freebie’ benefits means nearly all over-65s know about them but their financial value is dwarfed by other benefits which are less well known,” Lowe said.

He added: “People should check whether they could be entitled to additional financial support throughout their adult life, but reaching State Pension Age should act as an important reminder to take a closer look. For a start, people must actively claim their State Pension and they will also be able to start claiming the two elements of Pension Credit as well as Council Tax Reduction – if they are eligible – from State Pension age.

“Pension Credit is particularly important as it is the gateway to other benefits including the free TV licence, support with medical and heating costs, as well as additional Government means-tested support as we have seen through the energy crisis.”

Lowe added: “Our own experience shows many are missing out and suffering significant financial loss from not claiming these benefits. Based on in-depth fact-finding interviews with clients seeking equity release advice we found that last year nearly two-thirds of pensioner homeowners eligible for Council Tax Reduction failed to claim at an average annual loss of £1,003.

“We urge everyone nearing retirement to check if they’re entitled to extra state benefit income.”