Pensioner homeowners missing out on state benefits they’re entitled to
The firm’s annual customer insight report found that more than four in 10 (42%) eligible pensioner homeowners are failing to claim any benefits and consequently missing out on an average of £830 a year. A further two in 10 (20%) are under-claiming and missing out on a typical £702 of extra income.
The research from Just Group, based on fact-finding interviews with clients seeking advice on equity release during 2020, shows about a third (33%) were entitled to one or more benefits.
Stephen Lowe, group communications director at Just Group, said: “Once again we have found meaningful sums that would make a massive difference to people’s lives are not being claimed. It reflects the government’s own figures that show billions go unclaimed and raises serious questions about whether people in most need are able to navigate the complexities of the benefits system.”
The highest amount of extra income lost was £4,854 year by a customer in Durham who was failing to claim any benefit but was eligible for Council Tax Reduction and Guaranteed Pension Credit.
In total, more than half of those eligible for more were missing out on at least £500 a year and a quarter missing £1,000 or more a year.
Lowe said: “Helping them to claim their full benefit entitlement reduces, and can even remove, the need to release equity at that time. This gives them extra income immediately and the peace of mind that leaving the maximum value tied up in their homes provides them with more flexibility to use that wealth for themselves later in retirement or to pass it on to loved ones.”
Which benefits are pensioners not claiming?
Guarantee Pension Credit is the main benefit targeted at helping low-income pensioners. It has the highest take up rate of all the four key benefits with four out of five (80%) who are eligible claiming. But those failing to claim are missing out on an average £2,656 extra income per year, the most of all the benefits.
Savings Pension Credit has the lowest take-up rate among state pension-aged claimants, of just 33% of those who are eligible. Those failing to claim are typically missing out on £576 a year.
Council Tax Reduction is claimed by less than half (47%) of those who are entitled to claim with an average shortfall of £796 a year.
Lowe said the findings raised questions about the support and guidance available to those struggling for income, particularly among homeowners.
He said: “Our research last year found that nearly half (48%) of homeowners aged over-65 had never checked their entitlement to state benefits compared to just one in seven (14%) who are renting.”
“It reinforces the message that benefits information is integral to retirement guidance and that those struggling for income should check if they are missing out.”
Helen Morrissey, pension specialist at Royal London, said: “These benefits have the potential to make a very real difference to the lifestyles of the poorest pensioners and yet take up has remained stubbornly low for years.
“Pension Credit also acts as a gateway to further benefits – most notably the free TV licence which has been limited to those aged 75 on Pension Credit. Government did launch a campaign aimed at raising awareness last year but this will have been impacted by the coronavirus pandemic – it must make renewed efforts to reach those affected and prevent millions of pensioners from missing out on money they are entitled to.”