Pensioners struggle as flagship benefit fails thousands

More than half of older people are cutting back on essentials such as heating and food, and one in 10 of the poorest pensioners have been forced into debt by the rising cost of living, according to a new report by Age Concern.

With a third of those eligible still missing out on the Government's flagship benefit Pension Credit five years since its introduction - the charity is calling for urgent government action to increase take-up. To overcome the deeply ingrained barriers to claiming benefits, Age Concern wants the Government to introduce a new system of automatic payments as soon as possible - an idea supported by seven in 10 older people - and reform the benefits system to help the poorest pensioners cope with their escalating household bills.

The report, Flagship or Flagging? - launched today (Friday 26 September) to mark the anniversary of Pension Credit - reveals that six in 10 low income pensioners are only just getting by or are finding it difficult to manage financially. Key findings from the report include:

Two-thirds (66%) of pensioners are cutting back on the amount of gas and electricity they are using, over half (52%) are buying less or poorer quality food, and 49% are planning on cutting back their heating this winter.

One in 12 pensioners overall, and one in 10 low income pensioners, have built up debt due to the increased cost of living.

Pension Credit has made a noticeable difference to 82% of claimants and nearly all recipients (95%) would definitely or probably recommend others claim it.

Over half (56%) of those receiving Pension Credit said they worry less about essential bills.
Awareness of Pension Credit is generally high but one in eight older people, and one in six of those over 80, have still not heard of Pension Credit.

Seven out of 10 pensioners think that automatic payments would significantly improve the process of paying benefits, especially if data security can be improved.

The report clearly shows that claiming Pension Credit is making a noticeable difference to those receiving it but the glaring problem with Pension Credit remains its low take-up level. Despite huge numbers of pensioners currently experiencing financial hardship, and pensioner poverty levels recently rising for the first time in a decade, up to £2.8billion in Pension Credit still remains unclaimed by 1.8 million pensioners. If the benefit was paid automatically, those missing out would be on average £1,477 a year better off.

The Government has made some efforts to improve the take-up of Pension Credit and further positive, though limited reforms to the claiming process are about to come into effect. But the charity is warning that these are nowhere near radical enough to significantly increase take-up. Furthermore, unless take-up dramatically improves, the decision to reduce the period for which older people can claim backdated benefits to fund these reforms will penalise the very poorest.

Gordon Lishman, Director General of Age Concern, said: "It is deeply wrong that billions of pounds in benefits cash is failing to reach the poorest pensioners at a time when thousands are feeling forced to cut back on essentials such as food and fuel.

"There can be no doubt that current measures to tackle the scourge of pensioner poverty are falling pitifully short of the mark. Pension Credit has the potential to lift hundreds of thousands of pensioners out of poverty, but will remain more flagging than flagship without urgent action to reform the faltering benefits system. Introducing a system of automatic benefits it is the only effective way to reach all those who need help through these difficult financial times."

Age Concern's key report recommendations:

A clear government strategy is needed to address low take-up of Pension Credit and other benefits.

Automatic payments of Pension Credit and other benefits should be introduced, with adequate data-protection safeguards, at the earliest opportunity.

In the meantime, older people should be able to claim all means tested through a single telephone claim line. Local authorities processing Council Tax Benefit and/or Housing Benefit claims should also routinely pass details to the Pension Disability and Carers Service to identify Pension Credit entitlement.

Given low take-up rates and the exceptional increases in living costs this year, the Government should mount a high profile campaign to improve take up of benefits this winter. The Government should also make an emergency payment of at least £100 to all pensioners entitled to benefits.

The charity is urging all pensioners who are struggling to make ends meet to put in a benefits claim now so they don't lose out as a result of the backdating reductions from October 6. Any older person, their friends or family, who would like more information about the benefits available can contact Age Concern's freephone information line on 0800 00 99 66 or their local Age Concern may be able to help.