Pension credits: more than £3 billion unclaimed

Millions of Britons are missing out on thousands of pounds every year by failing to claim pension, housing and income-related benefits.

According to the Department of Work and Pensions, up to 1.3 million pensioners are failing to claim pension credits worth £2,500 every year – or £3.5 billion in total.

Pension credits are designed to make sure pensioners who get below £163 (or £248.80 for couples) receive a minimum income each week.

Helen Morrissey, Royal London pension specialist, says: “This has been a long-running issue that needs to be addressed by government sooner rather than later."

She adds: “This is a benefit aimed at the poorest of pensioners and steps must be taken to ensure they get the support they need.”

Another 1.3 million families who were entitled to receive housing benefit worth £3,000 a year – or £4.2 billion - also failed to claim.

Meanwhile, half a million families did not claim income support or employment support worth £4,500 a year – or £2.4 billion.

The DWP says that 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.

Pritie Billimoria from the charity Turn2us, says: “At a time when a rising number of people are living poverty, it is incredibly worrying to see over £10 billion of benefits are left unclaimed.

“Welfare benefits are a safety net and too many people are slipping through. It is entirely unnecessary that young families are facing eviction, working parents are skipping meals so their children can eat and people are going without the very basics such as heating."

She adds: “People all too often presume they’re getting all the financial support available or that they’re not entitled to anything and many also fear that their claim will be rejected.

“It can be difficult to know where to turn for support and daunting to ask for help. But anyone on a low income needs to regularly check that they’re getting all the help available to them.”

How do these benefits work?

Pension credit

Pension credit is an income-related benefit made up of two parts.

The guarantee credit tops up your weekly income to £163 if you are single, or £248.80 for couples.

Savings credit is an extra payment for people who saved some money towards their retirement by saving or with a pension other than a state pension.

The additional income provided by savings credit is worth up to £13.40 a week for a single person, or £14.99 for couples.

However, you might not be eligible for this credit if you reach state pension age on or after 6 April 2016.

Housing benefit

You could get housing benefit to help you pay your rent if you’re on a low income.

Housing benefit can pay for part or all of your rent. How much you receive depends on your income and circumstances.

You can apply for housing benefit whether you’re unemployed or in work.

Income support

If you are not in full-time work, or have a low income, you may be entitled to income support.

The actual amount that you get depends on your circumstances, but if you qualify and have no income, you’ll get at least £57.90 a week.

If you are single you could get a maximum of £73.10 a week, while couples are entitled to a maximum of £114.85.

Employment support allowance

If you are out of work because you are ill or disabled, you may be entitled to employment and support allowance of up to £110.75 a week, or more if you have a severe disability.

This article was originally written by our sister publication Moneywise.

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