You are here: Home - Retirement - Retiring now - News -

Retirees fail to claim £3.5bn pension credit: check if you’re entitled

Written by: Paloma Kubiak
Four out of 10 retirees who are entitled to receive pension credit failed to claim the benefit, missing out on £3.5bn of state aid.

Pension credit is a means-tested benefit which takes into account savings. It ensures couples or individuals receive a minimum level of income in retirement and it comes in two parts: guarantee credit and savings credit.

Six out of 10 (64%) retirees who were able to claim pension credit did so in 2016/17, official statistics from the Department for Work and Pensions (DWP) reveal.

As such, four out of ten are missing out, equating to 1.3 million families. DWP said in total £3.5bn was left unclaimed, amounting to £2,500 per year for each family. It said take-up may be affected by factors such as the attractiveness of the benefit, lack of awareness or the perceived stigma of receiving a benefit.

The take-up of guarantee credit (64%) was higher than the take-up of savings credit (47%) which could be down to the difference in the average weekly amounts people were entitled to.

Those entitled to and in receipt of guarantee credit received a substantially higher average weekly amount (£68) than those entitled to and in receipt of savings credit only (£7).

The statistics also show that the take-up of pension credit by those under the age of 75 is higher than those aged 75 or over (61% and 59% respectively). And couples (50%) are less likely to claim than single men and single women (both 63%).

Benefit entitlements

Guarantee credit tops up weekly income to at least £163 for a retired individual or £248.80 for retired couples. To claim, an individual or the oldest member of a couple must have reached ‘pension credit qualifying age’ which depends on your date of birth but is effectively equal to the state pension age for women – 65 from October 2018 and 66 by October 2020.

Savings credit is an extra payment designed to reward those who saved some money for retirement but would otherwise receive less benefit as a result. It can be up to £13.40 a week for single people and £14.99 a week for couples. To be eligible, you must be 65 or over. Most people who reach state pension age after 6 April 2016 won’t be able to claim savings credit.

Related: See’s The benefits worth £100s you could be missing out on for more information.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

PayPal closing down Money Pools

The ability to create new Money Pools will be disabled from 30 September, while existing Money Pools will be s...
PayPal closing down Money Pools

IR35 changes driving contractors out of self-employment

More than a third (35%) of contractors have left self-employment since the changes to IR35, either moving into...
IR35 changes driving contractors out of self-employment

How to get 5% interest without tying up your savings for years

You don't have to put your money into a three-year fixed rate bond to get an inflation-beating return on your...
How to get 5% interest without tying up your savings for years

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week