A Department for Work and Pensions (DWP) report has found that £1.7 billion of pension credit went unclaimed in the 2019/20 financial year, with as many as 850,000 families missing out on an average of £1,900 a year1.
The DWP said just two thirds (66%) of people entitled to claim pension credit in 2019/20 did so. Take-up for guarantee credit was 73%, against 43% for savings credit. The DWP said the gap could be influenced by the difference in the average weekly amounts people were entitled to: the estimated average weekly amount unclaimed was £57 for guarantee credit and £6 for savings credit. Those aged under 75 were more likely to claim (68%) than those over 75 (65%)1.
Pension credit is a weekly benefit for people over state pension age on a low income, and it acts as a gateway to other support including council tax support and cold weather payments1. It has two parts, guarantee credit and savings credit, and claimants may be eligible for one or both. Only people who reached state pension age before 6 April 2016 qualify for savings credit1.
The rates for 2021/22 and the increases announced for April are set out below.
| Element | 2021/22 | From April |
|---|---|---|
| Guarantee credit, single person | £177.10 a week | £182.60 a week |
| Guarantee credit, couple | £270.30 a week | £278.70 a week |
| Savings credit, single person | Up to £14.04 a week | Up to £14.48 a week |
| Savings credit, married couples and civil partners | Up to £15.71 a week | Up to £16.20 a week |
Source: Which?1
"A new report by the Department for Work and Pensions (DWP) revealed that a total of £1.7 billion of pension credit went unclaimed in the 2019/20 financial year."
To qualify for guarantee credit a person must have reached state pension age, currently 66 for both men and women, and live in the UK. Couples are only eligible once both partners reach state pension age; a couple who are not eligible for guarantee credit can both apply for universal credit instead. Couples already receiving pension credit before 15 May 2019 can continue to claim regardless of the partner's age. Carers, people with severe disabilities and those with certain housing costs may qualify for a higher level of guarantee credit1.
Savings credit provides extra money for people who have made some provision for retirement through saving or a pension other than the basic state pension. To qualify, a single person needs a minimum income of £153.70 a week, or £244.12 a week for a couple1.
Why it matters for households
The figures cover 2019/20, so they describe money that was not claimed in that year rather than a change taking effect now. The practical effect is that around a third of those entitled to pension credit did not receive it, and the DWP estimates the average unclaimed amount at £1,900 a year per family1.
Because pension credit is a gateway benefit, non-claimants may also have missed passported support. That includes cold weather payments of £25 for each week of cold weather where the temperature in an area falls below zero degrees for seven or more consecutive days between 1 November and 31 March; help with NHS costs such as prescriptions, dental treatment, glasses and transport to hospital appointments; a TV licence for those aged 75 and over; housing benefit for renters; support for mortgage interest, including ground rent and service charges; and council tax support, the amount of which depends on local council criteria1.
The April rate increases apply to people already receiving pension credit and to new claimants who qualify at those rates1.
What happens next
Applications can be started up to four months before a person becomes eligible for pension credit. An application made after reaching state pension age can only be backdated by three months1. Claims can be made online, by post or by phone on the pension credit claim line, 0800 99 1234, open Monday to Friday between 8am and 6pm; Relay UK can be reached on 18001 followed by that number. Postal claims go to The Pension Service 8, Post Handling Site B, Wolverhampton, WV99 1AN1. A decision can be challenged through mandatory reconsideration1.
The DWP report does not set out any further take-up measures, and no next steps beyond the April rate changes have been reported1.
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