Pension credit applications need to be ‘decluttered’ and in future automated to help older people facing rocketing bills, according to an influential finance industry veteran.
Take-up is currently ‘feeble’ with an estimated 850,000 eligible households missing out on pension credit, says Henry Tapper, who is putting together a working group to reduce pensioner poverty by bringing that number down.
Pension credit tops up weekly income to a minimum of £182.60 for single people and £278.70 for couples after an annual rise next month, but you can gain thousands of pounds on top via help for housing, heating, council tax, TV licences and other bills.
Cost of living: Inflation is running at 6.2 per cent, while the state pension and pension credit will rise 3.1 per cent next month
Tapper, who chairs industry networking platform Pension Playpen, says ‘the pension industry should be getting stuck in’ to help bring down the numbers of non-claimants by ‘making the benefit come to the people who don’t know of it’.
After a recent meeting with Pensions Minister Guy Opperman, he promised his new working group will create a feasibility study on how to simplify eligibility criteria and make pension credit automatic where there is a clear entitlement.
Tapper’s initiative comes after older people struggling with the rising cost of essentials received no extra help from the Chancellor in last week’s Spring Statement.
There is widespread anger that the triple lock was scrapped this year, so the state pension and pension credit will increase by 3.1 per cent in April, while the rate of inflation has just hit 6.2 per cent.
Tapper says: ‘With inflation rocketing, take up of pension credit is a particularly urgent issue right now. The Spring Statement was shocking news for pensioners.
‘If the triple lock had been applied this year, pensioners would have expected a state pension increase of 8 per cent but are instead facing a real fall in the cost of living of 5 per cent.
How to apply for pension credit
You can apply yourself by phone, online or by post, or a friend or family member can do this on behalf of an elderly person.
You can call 0800 99 1234, claim online here, or find out how to apply by post here.
Charities also have further useful information.
Age UK has a help page here, and a free national advice line on 0800 169 65 65 where staff will check you are receiving everything you are entitled to, including pension credit and attendance allowance.
The Citizens Advice Bureau offers help here.
‘For those on the breadline, that is 5 per cent they cannot afford to lose. It is a disgrace that we have pensioners living in poverty, whilst at the same time 850,000 households are not claiming this much needed benefit.’
Tapper says he aims to create a strategic solution to the pension credit take-up problem, explaining: ‘Pension credit eligibility is really complicated and it does need to be decluttered. In stage one we will need to be a bit less concerned with the minutiae.
‘The majority of information needed is available and can be factored into an automated system operated by Government,’ he adds, likening this to the work being done on pension dashboards, or ‘real time information’ sent by employers to the taxman.
‘We can do things that are better, short term tactical fixes, and it is not impossible to get this automated. It will take time and will.’
Tapper says the last DWP study of people with potential pension credit claims done in 2012 found they didn’t know what it was or whether they were eligible, and were worried that by claiming they would lose out elsewhere.
‘While there are many obstacles to people claiming pension credit, the most worrying of all is that many don’t even know it exists. It is time that the Government considers automating its delivery rather than relying on the current difficult application process.’
He adds: ‘The efforts of the Department for Work and Pensions to get the message out through regional newspapers is welcome, but more can and should be done.
‘I am told by the Minister that there is a Pension Credit Taskforce, but it seems very low profile and can’t even be googled. Promotion shouldn’t be left to [TV presenter and campaigner] Martin Lewis, the pension industry should be getting stuck in.’
Asked for comment on Tapper’s project, Pensions Minister Guy Opperman responded: ‘We want to ensure pensioners receive all the support to which they are entitled and continue to work closely with stakeholders and others to increase awareness of pension credit.
Henry Tapper: Pension industry should be getting ‘stuck in’ to help improve pension credit take-up
‘The latest figures show take up of pension credit is at its highest level since 2010, with the number of new claims 30 per cent higher in 2021 compared to 2019.’
What is being done to promote pension credit, and how do you get help?
Former Pensions Minister Ros Altmann has campaigned for years to raise awareness of pension credit, including urging relatives and friends of hard-up pensioners to help them apply via an article on This is Money.
She says: ‘Increasing take of pension credit is absolutely essential as we are about to see a sharp increase in pensioner poverty.
‘Not only is it a way to top up those with inadequate state pensions (mostly women) but it also gives people additional money from other extras available to those who live on pension credit. These are worth hundreds or thousands of pounds a year in extra money.’
Altmann says pension credit needs proper promotion, adding: ‘The Government has said it wants to increase take-up but has done little to achieve this important aim.
‘Promoting pension credit will cost serious sums of money with national TV, local radio and local or national newspaper adverts – in language that can be easily understood.’
Age UK has also tried to help more people apply for pension credit, and its phoneline staff assist people with claims.
Charity director Caroline Abrahams says: ‘Pension credit can make such a difference to an older person’s standard of living that it’s a crying shame so many who should be getting it are missing out.
The latest figures show take up of pension credit is at its highest level since 2010, with the number of new claims 30 per cent higher in 2021 compared to 2019
Guy Opperman, Pensions Minister
‘Successive governments have been appallingly complacent about the poor take-up figures and have essentially gone along with the idea that it’s OK for so many pensioners on low incomes to go without money that is rightfully theirs.
‘When the Government passed responsibility for TV licences for the over-75s to the BBC several years ago, it led to an unprecedented amount of publicity concerning pension credit, because only those in receipt of it were to be eligible for a free licence.
‘We hoped this would lead to a big uplift in successful pension credit claims, but in fact the increase was quite modest. The latest figures show about a third of eligible pensioners are still not getting their due.’
‘Pension credit, as currently constructed and delivered, is just not reaching everyone who needs it and needs a fundamental review. With prices going through the roof and many older people on low incomes struggling to pay their bills, there will never be a more important time to ensure extra financial help reaches those who badly need it.
‘Meanwhile, we urge older people to check their full entitlements and to put in a pension credit claim if they think they may be eligible.’ See the box above on how to contact Age UK for help with an application.
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