How do you claim pension credit? Claims spike as household bills soar

Claims for pension credits have soared – but so have denials – as older people try to boost their incomes to pay rising household bills.

The number of successful applications rose by 75 percent to 143,000 in the year to April last year, while the number of refusals rose by 231 percent to 95,500.

This follows a government awareness campaign to encourage uptake of the payments, which will deliver a host of other benefits.

Pension Credit tops up weekly income to a minimum of £201.05 for singles and £306.85 for couples.

You could earn thousands of pounds on top of it, including help with housing costs, heating, council tax, TV licenses and other bills, and if you receive a pension credit you’ll be eligible for living expenses payments from the Treasury.

New claims data has been obtained under a Freedom of Information request by financial services firm Quilter, which says figures so far for 2023/2024 suggest claims for pension credits will rise again – see below.

About 118,200 claims were processed between April and September this year, but almost 40 percent were unsuccessful, according to figures from the Department for Work and Pensions.

Quilter says reasons for refusing a claim include having too high an income, not living in Britain, not providing all the information requested, not making a claim on time or not having the right age.

> How to apply for a pension discount: See the box below

Data on claims and denials over the past five years

If you think it is wrong, you can ask for the decision to be reviewed, through a process called ‘mandatory reconsideration’. This is free and does not require a lawyer or other legal assistance.

The DWP published figures on the use of pension credits last month, showing that around 880,000, or six in 10 families entitled to them, did not claim them in 2021/2022.

Up to £2.1 billion went unclaimed, or around £2,200 a year for each family entitled to pension credit but not claiming it.

The pandemic may have distorted the figures, and the government has been running an awareness campaign to encourage vulnerable older people to apply for pension credits.

This tells older people to ignore myths that could stop them from applying – including that having savings, a pension or owning a home are barriers.

It has also launched a trial directly targeting people who may be eligible for a pension credit, encouraging them to apply.

Older people who are part of households receiving housing benefit from ten local authorities received letters with an ‘invitation to make a claim’.

However, pensions experts have called on the DWP to do more to directly target people who are likely to be eligible and ask them to apply.

“It is very encouraging to see so many more people being granted pension rights, and especially at times like these, as any increase in a pensioner’s income can have a major impact on the quality of their life,” said Jon Greer, head pension policy at Quilter. .

“Unfortunately, so many people are unaware of these credits or simply do not realize they qualify.

‘Despite this increase in the number of benefits, there will still be hundreds of thousands of pensioners who can claim benefits, but do not.

‘What is clear is that major government-backed campaigns, such as those over the past few years, can have a huge impact on awareness, but risk being forgotten over time.

‘A system of automatically awarding benefits based on other data held by the DWP seems like a simple answer, but is unrealistic in practice as the data for some benefits is not the same as for others.

‘That said, existing data can help identify those who may be more entitled, and who could then be subject to a more targeted approach.’

Former Pensions Secretary Steve Webb said: ‘There is no doubt that last year saw a surge in interest in pension credits and substantial growth in claims.

‘The fact that more than 60,000 additional successful claims have been received is very good news. But there was a downside to this relatively untargeted activity: a total of 95,000 people filed unsuccessful claims.

‘This will have been frustrating for them and delayed the processing of successful claims.’

Webb, now This is Money’s pensions columnist and partner at LCP, added: ‘While there is scope for general publicity campaigns, a more effective approach would be for the Government to make use of the data it already holds – particularly on pensioners who have already applied for housing benefit – in a ‘laser-like’ way to reach those missing out on pension credits.

‘This helps those most in need in an efficient way for everyone involved.’

> How does the informal care premium on pension credit work? Steve Webb explains

Ros Altmann, a former Pensions Minister who now sits in the House of Lords, said: ‘This is very interesting and it is clear that there has been a big push to try to increase pension credit claims – which had some impact after the pandemic , or perhaps it was a consequence of the pandemic and subsequent inflationary pressures.

“However, the total number of claims granted or denied each year is significantly lower than the number of claims submitted from all three sources.

“It would be interesting to find out how long it takes for claims in general to be assessed and decided.”

Lady Altmann continued: ‘It is so important that every pensioner who is entitled to a pension credit also signs up because the extra benefits they will receive, even if they only receive a small part of the pension credit payments themselves, are potentially worth thousands of pounds. of pounds extra.’

A DWP spokesperson said: ‘We want to make sure our support is there for those who need it, and our extensive communications campaign has helped push claims for pension credits to a record high.

‘In addition, we have supported pensioners with the biggest state pension increase in history this year, committed to the triple lock and are providing pensioners with up to £600 to help with heating costs this winter.’