A former government minister has argued that providing "automatic" access to Pension Credit is critical for Britain's poorest pensioners to prevent a crisis with their bills. As it stands, up to 800,000 pensioner households are not receiving Pension Credit, despite being eligible.
By not claiming, they are missing out on crucial weekly funds of £332.95 for couples, intended for everyday living costs. The problem is set to worsen as those pensioners will also lose entitlement to the Winter Fuel Payment, potentially up to £300, because Chancellor Rachel Reeves has resolved to cut the benefit for all but those on Pension Credit or select other aids.
Sir Steve Webb, the ex-pensions minister and Liberal Democrat MP, has suggested an amendment to official paperwork which could greatly increase Pension Credit uptake by ensuring automatic enrolment for those who qualify. Sir Steve is urging the Department for Work and Pensions ( DWP ) to collaborate with local councils and add a new checkbox on authority forms aiding low-income individuals, which would directly initiate a Pension Credit claim.
He believes that integrating this feature into existing housing benefit and council tax support forms managed by local authorities could serve as a trigger for a DWP-managed pension credit application. While speaking with the "i", he emphasised the significant positive effect such a change would have: "If you did that you would have a massive impact on pension credit take up. It would be utterly transformative."
Sir Steve, currently a partner at financial services firm LCP, suggested: "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." Sir Steve further added. "It's the DWP's job to change the system."
Pension credit, designed to assist pensioners with the lowest incomes, boosts their income to £218.15 per week for single individuals and £332.95 per week for couples. Approximately 1.4 million pensioners are receiving pension credit, averaging £3,900 annually. Some pensioners don't claim because they believe they're not eligible, while others feel there's a stigma attached to receiving benefits.
Charities are encouraging more people to verify their eligibility and the government has announced a publicity campaign to encourage claims. However, Sir Steve maintained that this won't effectively reach all 800,000 individuals who qualify for pension credit but don't claim it.
He estimated that "automatic" claims could help enrol about one-in-four of those eligible roughly 200,000 pensioners unlocking over £500m in unclaimed pension credit. A spokesperson for DWP 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."
