Pensioner homeowners are missing out on thousands of pounds of income by failing to claim their full entitlement to state benefits.
Some 42 per cent of eligible homeowners are failing to claim any benefit at all, losing out on £830 a year on average, according to a report by Just Group, a specialist in retirement products and services.
A further 20 per cent of eligible homeowners, despite claiming for some benefits, are on average still missing out on £702 a year, meaning more than six in ten pensioner homeowners are failing to claim what they are entitled to.
An average of £830 a year is being lost by pensioner homeowners failing to claim their full entitlement of state benefits according to the report.
The worst case discovered was a pensioner in Durham who was failing to claim any benefit despite being eligible for Council Tax Reduction and Guaranteed Pension Credit amounting to £4,854 a year.
There are 5.39 million retired household homeowners in England according to the ONS, making up 22.9 per cent of all 23.53 million household homeowners in England.
Almost £100 billion is provided for the state pension by the UK government each year according to Aviva, with some benefits, such as the state pension, open to all but some, such as pensions credit, means tested, whilst the age of eligibility can also vary for different benefits.
Why are pensioners not claiming?
According to Just Group, couples are less likely than single people to take up their entitlement, whilst over-75s are less likely to claim than younger pensioners.
A lack of awareness, issues with navigating the online system, and the stigma around claiming benefits are cited as key reasons for homeowners failing to take advantage.
‘We know that older people often miss out on the benefits to which they are entitled and we worry that significant numbers, whether home-owners or not, struggle financially as a result,’ said Caroline Abrahams, charity director at Age UK.
‘Many are simply unaware that extra support is there waiting for them whilst some older people are totally put off by the process, which they feel is too complicated or intrusive.’
‘It all adds up to billions of pounds going begging which by right should be in the pockets of older people who could really do with it.’
The Government itself estimates up to a million households are failing to claim pension credit amounting to £1.7 billion – equating to roughly £1,700 per household.
‘We have found meaningful sums that would make a massive difference to people’s lives that are not being claimed,’ said Stephen Lowe, group communications director at Just Group.
‘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.’
What benefits are being left unclaimed?
Savings Pension Credit has the lowest take-up rate with just 33 per cent of those eligible, claiming it, missing out on £576 a year according to Just Group.
Guarantee Pension Credit, the main benefit targeted at helping low-income pensioners, has a better take up rate with 80 per cent of those who are eligible claiming – but those failing to do so are missing out on an average of £2,656 extra income each year.
Council Tax Reduction is claimed by less than half of those who are entitled to claim, meaning those pensioners face an average shortfall of £796 a year.
Just Group advise all pensioners to check whether they may be entitled to some, or more, benefits than they are currently receiving.
|2020||Guarantee Pension Credit||Savings Pension Credit||Council Tax Reduction|
|Eligible to claim||7%||9%||31%|
|Take-up rate among those eligible to claim||80%||33%||47%|
|Average annual value of new claim identified||£2,656||£576||£796|
There are a range of resources available to support people in claiming their full benefit entitlement and to provide additional guidance, including organisations such as Money Advice Service and charities such as Age UK and Citizens Advice.
The government also highlights free, independent third-party benefit calculators to help pensioners find out what benefits they could be entitled to and how to claim.
‘Individuals should feel confident in claiming benefits to which they are entitled,’ said Peter Webb, communications lead, at Aviva.
‘Ultimately there is a role for government in ensuring people have the support they need.’
‘We encourage policymakers to explore how people, particularly those on low incomes, can access appropriate financial guidance and advice.’
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