Are you eligible for Pension Credit?

Briefing – Pension Credit campaign

Citizens Advice across Lancashire is launching a campaign to encourage residents to check their eligibility and claim Pension Credit, and associated benefits, if they can. Pensions rates increased on 1st April - so more people may be eligible.

What is Pension Credit and how does it work?

Pension Credit tops up a single person’s income to a minimum of £201.05 per week or a couple’s income to £306.85 per week. There are also additional amounts available if people are disabled, have caring responsibilities or are looking after a child.

Pension Credit is a gateway benefit, which opens up entitlement to other support including council tax reductions, extra energy support, housing benefit, free dental and optical treatments, and, for those over 75, a free TV licence. Even if a person is only eligible for a penny of Pension Credit, entitlement is opened up for these other benefits. As such, this benefit can be an important boost to those on low incomes, which can help residents who are struggling with the cost of bills as prices rise.

The gap between the average pension income and the Pension Credit top-up figure shows that there are many eligible pensioners across Lancashire who are not claiming Pension Credit. As of May 2022, the average state pension income for all of the Lancashire-14 areas is 10.86% below the minimum income guarantee on Pension Credit for a single person.

Pension Credit is separate to the State Pension and is extra financial help for older people on limited incomes that can be worth over £3,300 per year. 

If someone is 66 or older, they should check to see if they could be eligible for Pension Credit. 

The Live Issue

Our population is ageing, which means that there are increasing numbers of people of state pension age, a notable aspect of the latest census data.

Pension Credit is a state benefit which tops up the incomes of those of state pension age. It is underclaimed, with an estimated 850,000 households missing out on an estimated share of £1.7 billion per year. As of May 2022 there were 36,629 Pension Credit claimants in the Lancashire-14 area, each receiving an average amount of £60.50 per week. However, many people aren’t aware of the benefit, or their eligibility.

Between the financial years 2011/12 and 2020/21, the state pension nominal expenditure in the 12 areas which constitute Lancashire County Council increased from £1.507 billion per annum to £2.078 billion per annum. The nominal expenditure also increased in Blackpool (£186.3 million in 2011/12 to £229 million in 2020/21) and Blackburn (£134.1 million in 2011/12 to £174.1 million in 2020/21). However, in this period, the rate of pension credit being paid has decreased across all 14 areas (by 42.4% in the Lancashire 12, 43.6% in Blackpool, and 34.8% in Blackburn).

Government data demonstrates that this divergence cannot be justified by the argument that an increase in state pension rates has boosted people out of pension credit eligibility. The government holds data on state pension households. These households are made up of both single people and couples. In 2011/12 the weighted median net income (before housing costs) for these households amounted to £330. By 2020/21, this had increased by 16.6% to £385. However, over the same period, the minimum income guarantee for pension credit has increased by approximately 32.8% for both single people and couples.

This data demonstrates that pension credit rates have increased by more than income for state pension households between 2011/12 and 2020/21. The logical conclusion of this would be that more people should be claiming pension credit. However, the pension credit expenditure has reduced significantly. Furthermore, the argument which says this decrease must be a result of increasing the pension age is weak because the State Pension caseload has only decreased by 2.9% since February 2012. This has led the Citizens Advice Lancashire-wide Research and Campaigns Cluster Group to the conclusion that the issue for potential claimants is a lack of awareness.

Citizens Advice across Lancashire is launching a campaign to encourage residents to check their eligibility and claim Pension Credit, and associated benefits, if they can.

The current picture for Lancashire residents- why now?

We are currently in the midst of a Cost-of-Living crisis. There are several factors that are contributing particularly to this, including: price inflation, increased energy costs, food inflation, an increase in interest rates, and rising levels of debt. This is exacerbated by a frozen LHA rate which is keeping housing benefit too low to cover the cost of renting.

Not all these factors are directly affecting people of pension age, but many are. Consequently, as pensioners are on fixed incomes, rising prices are extremely challenging to deal with. That is why this campaign is relevant today.

A significant proportion of the 306,056 pensioners in the Lancashire-14 area have limited financial means. 36,629 of them (12%) are claiming Pension Credit. However, we know that there are people who are missing out. With the challenges that our pensioners are facing, now is the time to raise awareness and maximise our pensioner’s incomes.

How can someone check that they are eligible?

There is a free online calculator which can be found here: https://www.gov.uk/pension-credit-calculator 

Pension Credit claim line

0800 99 1234
NGT text relay (if you cannot hear or speak on the phone): 18001 then 0800 99 1234
Monday to Friday, 8am to 6pm (except public holidays)
Find out about call charges

Call Citizens Advice if you need help or advice about Pension Credit

www.citizensadvice.org.uk 

Find your local office:
https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/contact-us/