How do you claim pension credit? Claims spike as household bills soar

• Successful pension credit applications jumped 75% in the year to last April 
• But refusals also rose amid the rush of claims during cost of living crisis
• Find out the rules and how to get help with applying for pension credit below

Claims for pension credit have soared – but so have rejections – as elderly people try to boost their income to meet rising household bills.

Successful applications jumped 75 per cent to 143,000 in the year to last April, while refusals spiked 231 per cent to 95,500.

This follows a Government awareness drive to boost take-up of the payments, which unlock a host of other benefits.

Pension credit tops up weekly income to a minimum of £201.05 for single people and £306.85 for couples.

You can gain thousands of pounds on top including help with housing costs, heating, council tax, TV licences and other bills, and receiving pension credit qualifies you for cost of living payments from the Treasury.

New data on claims was obtained under a Freedom of Information request by financial services firm Quilter, which says the figures to date for 2023/24 suggest pension credit claims will rise again – see below.

Between April and September this year, there have been around 118,200 claims processed, but nearly 40 per cent have been unsuccessful, according to the figures provided by the Department for Work and Pensions.

Quilter says reasons for a claim being refused include having too much income, not being a UK resident, failure to provide all requested information, not claiming on time or not being the right age.

> How to apply for pension credit: See the box below 

Claims and refusals data over the past five years

You can ask for the decision to be reviewed if you think it is wrong, under a process called ‘mandatory reconsideration’. This is free and doesn’t require a solicitor or other legal help.

The DWP released figures last month on pension credit take-up which revealed that some 880,000 or six out of 10 families who were entitled did not claim it in 2021/22.

Are you elderly and anxious about bills? 

Find out more here about pension credit. You can apply yourself by phone on 0800 99 1234, do it online or get a form to do it by post. 

A friend or family member can apply on behalf of an elderly person.

Age UK is urging every older person struggling with bills, or friends and family who are concerned about them, to contact its helpline on 0800 169 65 65.

This is open every day of the year between 8am and 7pm, or you can visit Age UK’s help page here.

Age UK staff will check you are getting everything you are entitled to, including pension credit. 

Age UK also has a free, anonymous benefits calculator which can provide an estimate of what you could be entitled to if you want to find out this information privately.

Up to £2.1billion went unclaimed, or around £2,200 a year for each family who were entitled to but did not claim pension credit.

The pandemic might have skewed the figures, and the Government has been running an awareness campaign urging hard-up elderly people to claim pension credit.

This tells the elderly to disregard myths that might deter them from applying – including that having savings, a pension or owning a home are barriers.

It has also launched a trial directly targeting people who might qualify for pension credit, and encouraging them to sign up. 

Older people living in households receiving housing benefit across 10 local authorities were sent ‘invitation to claim’ letters.

However, pension experts have called on the DWP to do more to directly target people who are likely to be eligible and ask them to apply.

‘It is very encouraging to see so many more people being awarded with pension credits, and especially at times like these as any increases to a pensioner’s income can be transformational to their quality of life,’ says Jon Greer, head of retirement policy at Quilter.

‘Unfortunately, so many people are either unaware of these credits or simply don’t realise they would be eligible for them. 

‘Despite this increase in the number of awards, there will still be hundreds of thousands of pensioners able to claim but not doing so.

‘What is clear is that major Government-backed campaigns like the one mounted over the past couple of years can have a huge impact on awareness, but risk being forgotten over time.

‘A system of automatically awarding benefits based on other data the DWP holds would appear to be a simple answer, but in practicality is unrealistic given the data for some benefits isn’t the same as used for others.

‘That said, existing data could help identify those who may be more likely to be entitled, who could then be subject to a more targeted approach.’

Former Pensions Minister Steve Webb says: ‘There is no doubt that last year there was a surge in interest in pension credit and a substantial growth in claims.

Savings rules for pension credit explained 

A £10,000 rainy day fund is waived when you apply, though that sum was set in 2009 and is worth much less these days.

The figure is not a hard limit, just the threshold beyond which the amount of pension credit top-up you get starts to be affected.

> Find out more on the savings rules for pension credit

‘The fact that there were more than 60,000 extra successful claims is very good news. But there was a downside to this relatively untargeted activity which is that a total of 95,000 people made unsuccessful claims.

‘This will have been frustrating for them and will have slowed down the processing of successful claims.’

Webb, who is now This is Money’s pensions columnist and a partner at LCP, adds: ‘Whilst there is a place for generalised publicity campaigns, a more effective approach would be for the Government to use the data it already holds – particularly from pensioners who have already claimed housing benefit – to target those who are missing out on pension credit in a “laser-like” way.

‘This helps those most in need in an efficient way for all concerned.’

> How does the carer’s premium on pension credit work? Steve Webb explains

Ros Altmann, a former Pensions Minister who now sits in the House of Lords, says: ‘This is very interesting and it is clear that there has been a big push to try to get pension credit claims up – which had some impact after the pandemic, or perhaps was a result of the pandemic and subsequent inflation pressures.

‘However, the total figures of claims either awarded or rejected each year are substantially below the number of claims submitted from all three sources. 

‘It would be interesting to find out how long it takes for claims generally to be reviewed and decided upon.’

Lady Altmann went on: ‘It is so important that any pensioner entitled to pension credit does apply, because the additional benefits which they will receive, even if they are only entitled to a tiny amount of the pension credit payments themselves, are worth potentially thousands of pounds extra.’

A DWP spokesperson says: ‘We want to make sure our support is there for those who need it, and our extensive communications campaign has helped drive pension credit claims to an all-time high.

‘Alongside this, we’ve supported pensioners with the biggest state pension increase in history this year, have committed to the triple lock, and are providing pensioners with up to £600 to help with heating costs this winter.’