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Incorrect income and savings assumptions see pensioners miss out on benefits

Paloma Kubiak
Written By:
Paloma Kubiak

Three quarters of pensioners have never checked their eligibility for benefits as they mistakenly believe their savings or income would be too high to qualify.

More than a fifth of pensioners never checked their eligibility for state benefits because they assumed the value of their property would exclude them from making a claim.

According to the research from advisory firm HUB Financial Solutions, one in 10 said they hadn’t checked because they didn’t know how.

Simon Gray, managing director of HUB Financial Solutions, said this shows “we need to be proactive in educating, informing and helping retired households about how to access the support on offer.”

He added: “With billions of pounds of benefit income going unclaimed every year, it is vital that those struggling financially are not missing out because they wrongly assume they are not eligible.

“There is a huge range of resources for pensioners to help them check whether they could be entitled to receive additional State support. It is easy, free and could be worth substantial sums if they are able to claim some extra help.”

Hub found that out of customers who were looking into equity release options last year, over six out of ten were failing to claim any benefits despite being eligible for them.

It calculated that these households were missing out an extra £1,100 per year on income.

A further one in four were receiving less benefits than they were entitled to, losing out on an average of £660 of additional annual income.

Gray, added: “Every year our advisers find many homeowners, who are over the age of 55 and considering equity release, are missing out on benefits that they are eligible to claim.

“It indicates there may be a wider issue that people who own property are often under the mis-apprehension that they are not entitled to claim extra financial support from the Government.

“Yet, official figures show that most retirees in the lowest income quintile own their own home and many of these people will have been hit hard by the current economic situation. This is particularly relevant given those not claiming Pension Credit face the double whammy of missing out on the additional targeted cost of living support.”

“We’d urge homeowners who are struggling for income to check whether they could be entitled to receive state benefits – in a cost-of-living crisis, this support is worth its weight in gold.”

Are you eligible for pension credit?

Pension Credit is based on the amount of income you have coming in, and is calculated as a weekly benefit.

It is made up of two parts, there is Guarantee Credit where you must be of state pension age and live in the UK, and is based on income and savings of over £10,000.

If you are a single person whose income is below £201.05 per week, then it will be topped up to reach that figure.

If you are claiming as a couple, the credits will guarantee a weekly income of £306.85p.

The second part of Pension Credit is Savings Credit, which provides support for those on a modest income and is made available to those who were at a pension age by 6 April 2016.

If you are a single person, don’t forget you would qualify for a council tax discount of 25%.

Further reductions for those on low incomes or claim benefits may also be offered depending on the stipulations of your local council.

Related: Are you eligible for benefits?