DWP urged to give low income pensioners an automatic £3,900 cash boost

MPs are calling on the Government to rethink its Pension Credit strategy as the take-up is low.

A Scottish Liberal Democrat MP has urged the Department for Work and Pensions (DWP) to consider a new approach in its Pension Credit take-up strategy.

Pension Credit is a benefit administered by the DWP for state pensioners on a low income.

Pension Credit comes in two different instalments, the Guarantee Credit and Savings Credit, and is different to the state pension.

During a debate on the impact of the cost of living crisis on pensioners, Wendy Chamberlain told MPs in Parliament that two million older people are living in poverty, a staggering one-in-six.

Ms Chamberlain highlighted how another million are “sitting just above the poverty line silently struggling to make ends meet”.

Even with increased efforts to spread the word, Pension Credit take-up remains at 63 percent.

Last year the DWP launched an “invitation to claim” trial that targets those likely to be eligible for Pension Credit – being aimed at people who are above state pension age and in receipt of housing benefit.

They sent letters to potentially eligible households and celebrities such as Harry Redknapp encouraging 880,000 people to claim.

The Lib Dem’s shadow work and pensions spokesperson suggested the Pension Credit claiming process be made simpler, with those in receipt of House Benefit and Council Tax reduction receiving it automatically as those benefits are already designed to help people on a low income.

Ms Chamberlain told MPs: “This top-up benefit is the simplest tool at the Government’s disposal to lift pensioners out of poverty. It feels like every year we have a new attempt at increasing uptake with a fancy leaflet or other information campaign.

“I am sure we all go to the drop-ins, have our pictures taken and share them with our constituents, but pension credit take-up remains stuck at 63%, which suggests that the campaigns simply are not working.

“Pensioners either do not know about the benefit or do not realise they are eligible, or some struggle with the stigma of being seen to claim it.”

Pensioners are being urged to check their eligibility for Pension Credit as soon as possible as they could be entitled to £3,900 in financial support.

Pensions Minister Paul Maynard has highlighted the financial assistance offered via Pension Credit.

He explained: “As the cold weather bites, we want every pensioner to receive all the help they can. I’m glad to be able to confirm that 99 per cent of those eligible for this generous support have received it.

“We also encourage low-income pensioners not already getting Pension Credit to check their eligibility as they could be on average £3,900 a year better off.”

The benefit currently tops up income to a minimum of £201.05 per week for single pensioners and £306.85 for couples – more if a person has a disability or caring responsibilities.

From April 2024, the payments will increase to £218.15 per week for single pensioners and £332.95 for couples.

The average Pension Credit claim is worth £3,900, according to the DWP.

The Guarantee Credit element currently tops up someone’s income to £201.05 if they are single or £306.85 if they are in a couple.

For Savings Credit, a claimant could get up to £15.94 extra a week if they are single or couples can receive an additional £17.84.