Government launches adverts for pension benefit – while cutting its value

The government has launched a campaign to encourage poorer pensioners to apply for Pension Credit benefit to help with the rising cost of living – at the same time as it cuts the value of Pension Credit in real terms.

Pension Credit is the benefit paid to people on low incomes who are over state pension age, though they do not need to receive the state pension in order to claim it. It can be worth more than £3,300 a year.

Although over 1.4m people currently claim Pension Credit, the Department for Work and Pensions estimates that up to 850,000 eligible households do not, leaving up to £1.7bn unclaimed.

With fuel bills soaring, the government is launching an advertising campaign this month to encourage all pensioners to check if they could be eligible for Pension Credit. People can apply for the benefit online or by phone.

However, along with other benefits, Pension Credit is only rising in value by around 3.1% this year – reflecting the rate of inflation in the year to last September, but well below the current inflation rate of 5.5%, let alone the potential 8% rate forecast for later this year.

The government resisted calls to increase benefits by more than 3.1%, meaning the value of benefits including Pension Credit is effectively being cut in real terms, as its spending power is reduced.

Pension credit works by topping up a claimant’s income to reach a guaranteed minimum income level – £177.10 a week for single pensioners or £270.30 for couples. These amounts will rise to £182.60 for single pensioners and £278.70 for couples from 11 April.

Pension Credit can also provide access to other benefits, such as help with housing costs, council tax or heating bills – plus a free TV licence for over-75s.

Guy Opperman, Minister for Pensions, said: ‘We recognise the challenges some pensioners will be facing with the cost of living which is why promoting Pension Credit is a priority.

‘That’s why we’re calling on everyone with retired family, friends and loved ones to check in with them and see if they can get this extra financial support.’

The campaign also seeks to tackle some of the myths that may stop people applying, such as how having savings, a pension or owning a home are not necessarily barriers to receiving Pension Credit.

Caroline Abrahams, Charity Director at Age UK, said: ‘Pension Credit is something of a well-kept secret – many people have simply not heard of it.

‘We hope this campaign is the first step in a sustained government effort to bring Pension Credit to the older public’s attention, and we warmly support it for this reason. Pension Credit is really important for older people and deserves to be much better known.’

Photo by Huy Phan