Britain’s poorest pensioners should be given “automatic” access to Pension Credit to help them avoid a bills crisis, according to a former government minister.
Currently as many as 800,000 pensioner households are going without Pension Credit despite being eligible.
This means that they miss out on vital cash – £332.95 a week for a couple – to cover the cost of everyday essentials.
And the situation is about to get worse because they will also be denied the Winter Fuel Payment, which is worth up to £300.
This is because the Chancellor Rachel Reeves has decided to axe the payment to all pensioners other than those claiming Pension Credit or certain other benefits.
Former pensions minister and Lib-Dem MP Sir Steve Webb said a simple change to official forms to ensure eligible people are automatically enrolled on to Pension Credit could make “a massive difference” to take up rates.
Sir Steve wants the Department for Work and Pensions (DWP) to work with councils to create a new box – to be ticked on local authority support forms for people on low incomes – that would automatically put pensioners forward for a pension credit claim.
He suggested that the forms for housing benefit and council tax support, both run by local authorities, could be used to trigger a pension credit claim with the DWP.
He told the “i” : “If you did that you would have a massive impact on pension credit take up. It would be utterly transformative.”
Sir Steve, who is now a partner at financial services firm LCP, said: “If the DWP got councils to put a tick box on housing benefit and council tax support forms, a box that said, ‘I would like to be assessed for pension credit as well’, then there’s no need to make them jump through hoops again.
“It should be automatic and systematic,” added Sir Steve. “It’s the DWP’s job to change the system.”
Pension credit, aimed at helping pensioners on the lowest incomes, tops up their income to £218.15 per week for single people and £332.95 per week for couples.
Around 1.4 million pensioners are receiving pension credit, worth an average of £3,900 a year. Some pensioners do not make a claim because they assume they are not eligible, while some feel there is perceived stigma in receiving a benefit.
Charities are urging more people to check if they are eligible and the government has said there will be a publicity campaign to urge people to make a claim.
However, Sir Steve insisted this will not be effective in reaching all 800,000 people who are eligible for pension credit but do not claim it.
He estimated that “automatic” claims could help enroll around one-in-four of those eligible – around 200,000 pensioners – helping unlock more than £500m in unclaimed pension credit.
A DWP spokesperson said: “We want to ensure that every pensioner gets the benefits to which they are entitled, including pension credit and a winter fuel payment.
“We will work with local authorities to bring together the administration of pension credit and housing benefit as soon as operationally possible.”
