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‘Heartening and depressing’ as Pension Credit claims double in a year

Paloma Kubiak
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Paloma Kubiak

Claims for ‘chronically underclaimed’ Pension Credit have more than doubled in the most recent tax year, but rejections from the DWP have also soared.

In the 2022/23 tax year, nearly a quarter of a million Pension Credit claims were submitted, up from the near 111,000 made in the previous tax year.

While the majority of claims were successful (143,000), more than 95,000 were rejected by the Department for Work and Pensions (DWP).

According to the data obtained by investment platform AJ Bell, this rate is three times more than recorded in 2021/22.

The table below provides a breakdown of claims made, granted and refused:

Source: DWP for AJ Bell. Data correct as at 19 July 2023. DWP confirmed there will always be some claims awaiting a decision, meaning the ‘claims made’ figures will always be higher than the sum of those granted and refused.

‘Heartening and depressing’

An estimated 1.4 million retirees are eligible for Pension Credit, but an estimated 850,000 eligible households a year fail to claim.

For the current 2023/24 tax-free, if you are over State Pension age (66) and your income is less than £201.05 a week (£306.85 for a couple) then Pension Credit will top you up to that amount.

It’s worth an average £3,500 a year and even if you own your own home or have other income or savings, it’s worth checking the Government’s online pension credit calculator to see if you’re eligible.

Another key benefit of Pension Credit is that it acts as a gateway for other perks such as the free TV licence, council tax help and cost of living payments from the Government.

Tom Selby, head of retirement policy at AJ Bell, said: “Pension Credit has historically been chronically underclaimed by those who are eligible, with hundreds of thousands of households potentially missing out on thousands of pounds of valuable extra income per year. This is particularly tragic because those who are eligible for Pension Credit are likely to be among the poorest households in the UK.

“The rising cost of living has brought greater urgency to the issue, in particular because a successful Pension Credit application automatically triggers cost-of-living payments worth hundreds of pounds, as well as acting as a gateway to other benefits like free TV licenses and help with heating costs.

“In this context, the fact Pension Credit claims have more than doubled in the space of a year is both heartening and depressing. Heartening because it means over 60,000 more people received Pension Credit and the benefits that go with it in 2022/23, but depressing because it shows just how much retirees are struggling as a result of price rises.”

Selby added that if your Pension Credit claim has been turned down you may still be entitled to other benefits, so it’s worth checking to see if you are eligible for other forms of financial help.