Retirement Income  

Retirees failing to claim pension credit

Retirees failing to claim pension credit

Over-75 homeowners are failing to claim the full amount of pension credits they are entitled to, missing out on thousands of pounds in benefits each year, according to research.

Retirement specialist Hub Financial Solutions, part of Just Group, found that last year nearly one fifth (17 per cent) of over-75s homeowners were eligible to claim guaranteed pension credit, the main benefit for pensioners with low incomes, and a quarter (26 per cent) were able to claim savings pension credit, designed to reward those on low incomes who had managed to accumulate some savings.

However, according to research from Hub Financial Solutions, published yesterday (June 25), nearly half (46 per cent) of those eligible for guaranteed pension credit were not claiming, with £2,046 being the average amount of benefit lost each year.

In one case a pensioner was missing out on £4,173 a year, according to Hub Financial Solutions.

In comparison, four in five (80 per cent) were failing to claim savings pension credit, with the average amount unclaimed standing at £387 a year. 

Simon Gray, managing director at Hub Financial Solutions, said: “This is a snapshot of over-75 homeowners but official figures back-up the scale of the problem indicated by our research.

“It’s estimated by government that about 1.3m families entitled to pension credit do not claim and the loss to UK pensioners is around £3.5bn a year or £2,500 for each household.” 

The research also considered the attitude of over-65s towards claiming state benefits other than the state pension and found that only a small number, just one in 25 (4 per cent), said that it is because they do not want to be a burden on the state. 

Nearly half (46 per cent) of over-65s said they had never checked their entitlement and only one in 10 said they had checked within the last year. 

Of those who had never checked, seven in 10 (69 per cent) said it was because they believed their income or savings were too high to qualify and more than a quarter (27 per cent) said it was because they thought the value of their home would rule them out. 

One in 10 (5 per cent) believed that they would qualify but thought the amount of benefit would not make it worthwhile. This rose to 12 per cent of over-80s.

With some over-75s set to lose their free TV licenses next year, Hub Financial Solutions is warning this group of individuals to prioritise checking their eligibility for state benefits.

Mr Gray said: “The decision by the BBC to end automatic entitlement to a free TV licence for the over-75s should provide a wake-up call to everyone to check their eligibility for state benefits.

“The licence is £154.50 this year, but that is dwarfed by the sheer scale of the loss of annual income which in many cases is hundreds or thousands each year.

“The issue of free TV licences has inadvertently shone a spotlight on the far bigger problem of people who are struggling for income failing to claim the state support they should be receiving.”