One Million Pensioners on ‘Threadbare’ Income Missing Out on Top-Up

Ian Lewis[1]

Ian Lewis

Money Savings Advice One Million Pensioners on ‘Threadbare’ Income Missing Out on Top-Up

More than 1 million older people are losing out on tax-free payments from the government to help keep them out of poverty.

Researchers at Loughborough University found that only 61% of pensioners eligible for pension credit currently claim their weekly pension top-up, leading to 'significant knock-on effects' for the NHS and social care services.

Pension credit is a benefit available to people with small state pensions. It tops up your weekly pension income if it's below £173.75 for a single person or £265.20 for couples.

The tax-free top-up is designed to help those who are less well off pay for their basic needs and care in later life.

However, according to the new research, funded by charity Independent Age, around 6 in 10 people entitled to the benefit aren't claiming it.

The low take-up means that more elderly people are forced to turn to the NHS and social care services.

This costs around £4 billion each year, compared to the £2.2 billion that would be spent if everybody who is eligible for the benefit was paid.

According to the report, if take-up was 100%, 450,000 pensioners could be lifted out of poverty.

What we can see from this report is that ensuring the poorest pensioners have a livable income is not only the right thing to do; it's the economically responsible thing to do. Taxpayers are unnecessarily footing a health and social care bill of an estimated £4 billion, when if the Government ensured older people received the £2.2 billion to which they're entitled, many of these additional costs to our health and care systems would be alleviated. Without this money, many people are prevented from living with dignity and having a social, well-connected later life.

said Chief Executive of Independent Age, Deborah Alsina

The charity called on the government to publish a 5-year action plan to tackle what it called an 'indefensible' take-up rate.

Those pensioners who miss out on credit are also more likely to need social care, according to the researchers.

Independent Age claimed that having access to a weekly top-up could help reduce the taxpayer bill for the group's use of these services, which is currently between £66 - £189 million per year.

At the moment, pension credit is not automatically added to pensions which fall below the £173 threshold.

In order to start getting payouts, people must learn about the benefit and apply for it themselves.

They rarely tell you what you're eligible for – it's up to you to go and find out for yourself. For me, it's opened up the door to other things, like the winter fuel payment. "If I had any less than I did now, I'd be struggling to get by. It would make an awful difference. Many people don't realise that when you're on an income like mine, you have set out pound for pound where it's going to go. Quite frankly, when you've done that, there's nothing left.

Retiree Bert Pearson told Independent Age

You can apply for pension credit up to 4 months before you reach pension age online or by calling the Pension Credit Claim line (0800 99 1234)

Money Savings Advice Author Ian Lewis

Ian Lewis

Ian Lewis is one of our specialist financial writers. Ian has over 15 years of financial writing experience, having worked for some of the largest financial publications in the UK covering topics from mortgages, equity release, loans and financial claims, to name a few.

How does Money Savings Advice work

Money Savings Advice is an independent editorial company providing detailed information about numerous financial niches with the aim of helping consumers make informed financial decisions. We aim to provide hints, tips and techniques to help you make your money work for you. However, we are not perfect, and we accept no liability if anything we write about goes wrong.

  • The information detailed on Money Savings Advice does not constitute financial advice. It is always advised to do your own research to make sure the product/solution we write about fits your circumstances.
  • The aim of Money Savings Advice is to match you with a financial advisor, claims management company or another financial service company that can help you with your financial needs.
  • Money Savings Advice aim to provide the most up to date and accurate information about all financial subjects, and as such we sometimes link to other websites, but we (Money Savings Advice) can’t be responsible for their content.
  • Money Savings Advice is independent and not linked to any financial company.


Who are Money Savings Advice

Money Savings Advice is a trading name of RMM Digital Publishing Ltd. Registered trading address, First Floor, 85 Great Portland Street, London, W1W 7LT. Trading in England and Wales, company number 11550143 with data protection number ZA747669.

Back to top