Seventh annual survey shows pensioners missing out on hundreds of pounds of extra income
Six in 10 eligible pensioners failing to claim full State Benefit Entitlement
Of those who are claiming, one-third should be receiving more
Average loss of income to pensioner households is £610 a year
Benefits information should be at the heart of retirement guidance
Those failing to claim are missing out on an average of £576 per year, but in one case the amount not being claimed was £2,330. Among those who are claiming, one in three (37%) are not being paid their full entitlement with a £672 average annual loss but in one case the loss was £2,110. Overall, failing to claim any or the full entitlement costs those households £610 a year.
“Far too many pensioner homeowners who are struggling for income are missing out on benefits they are entitled to,” said Stephen Lowe, group communications director at Just. “This is the seventh year we have carried out this research and the seventh time we have issued the same warning.
“Take-up rates are far too low and it is costing pensioners dearly, in some cases several thousand pounds a year. This year we have also seen the third consecutive rise – from a quarter to a third – in the numbers claiming but not receiving their full entitlement which is a worrying trend.”
Checking eligibility to key benefits such as Council Tax support or the guaranteed or savings element of Pensions Credit is one of the first tasks undertaken by the company’s advisers when meeting clients. More than half are eligible to receive benefits but, of those, only two in five are actually receiving their full entitlement.
“Pensions and benefits are now so complex that few retirees understand all the options without professional help and it is costing them dearly,” said Stephen Lowe. “Take-up rates of State benefits are lower among homeowners than non-homeowners. Yet owning bricks and mortar doesn’t mean you are not struggling financially.
“Our view is that free guidance, from the government backed Pension Wise service, should be made the default option for all those heading into retirement unless they specifically opt out and should include information and advice about eligibility for and access to State benefits.”
The research from Just Retirement Solutions, based on in-depth fact-finding interviews with clients seeking advice on equity release, shows:
A more detailed look at the individual State benefits for older people reveals:
Couples are more likely to claim benefits with about seven in 10 of those eligible claiming compared to six in 10 for single pensioners. Older people are also more likely to take-up benefits with 75% of over-75s who are eligible claiming compared to 56% of those aged 65-74 and just 43% of those aged 55-64.
Guarantee Pensions Credit is the benefit most likely to be claimed by those who are eligible with take-up at around 85%.
Those not claiming are missing out on £572 a year on average. However, of those who are claiming Guarantee Pensions Credit, more than one in four do not receive their full entitlement which in one case was £1,059 a year.
Savings Pension Credit was only claimed by 39% of those who were eligible. Those failing to claim were on average missing out on £431 a year with the biggest loss £906 a year.
Council Tax support was only claimed by 49% of those eligible to claim it. The average loss to those failing to claim was £529 a year, but in the worst case £1,810 a year.
“It’s interesting that the largest amount of ‘missing’ benefit we found was £2,330 which was for a 92 year old in the Midlands, who was not claiming any benefit until our adviser crunched the numbers and found she should be receiving £45 a week,” said Stephen Lowe. “We can’t tell exactly how much she missed out on over the years but it could be in the tens of thousands of pounds.
“About one in 10 of those eligible to claim were missing out on more than £1,000 a year with nearly half not claiming any benefit at all. And another two in 10 were missing out on between £500 and £1,000 a year.
“These are life-changing amounts of money which in many cases are not being claimed by those who are struggling the most. Even once in the system, people have to take care they are claiming the correct amount.”
Overall about half of those people we checked who were eligible for State help missed at least one benefit, one in 15 missed out on two and one in 30 missed out on three.
“The lesson for those finding money a bit tight is not to assume there is no help available,” said Stephen Lowe. “The government website direct.gov.uk is a mine of information or you can go to Citizens Advice Bureau or contact a professional intermediary.”
The most recent official figures suggest more than 2 million pensioners are eligible for Pensions Credit (either Guarantee or Savings) with take up of around 63% in 2013/14*. About £6.7 billion was claimed but £2.9 billion was unclaimed.
Overall, nearly nine in 10 pensioner couples and around two-thirds of single pensioners own their own homes
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