Retirees fail to claim £3.5bn pension credit: check if you’re entitled
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%).
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 YourMoney.com’s The benefits worth £100s you could be missing out on for more information.