New research has shown that many pensioners are losing out by not claiming benefits to which they are entitled.
The figures from Annuity provider, Just Retirement, show that around 2.5 million pensioners are failing to claim benefits such as winter fuel payments, free bus passes, and council tax credits often because they are not aware that they qualify.
Just Retirement believe that 20% of all pensioners are failing to claim any state benefits whatsoever and are therefore losing as much as £872 each year.
According to the Annuity provider, a further third of pensioners are claiming some state benefits, but not everything to which they are entitled, and are therefore losing an average of £676 per year.
If correct, the research clearly shows what retirement experts have feared for many years, that pensioners are not claiming what is rightfully theirs, either because they don’t know what benefits they can claim, or because the system is just too complicated.
Pension Credit, the benefit used to top up the State Pension, is a prime example.
Whilst figures show that the majority of pensioners know the benefit exists, the take up rate according to the Department for Work & Pensions (DWP) is only between 60% – 70%, simply because pensioners don’t think they qualify.
Over the past few months Annuity rates have plummeted reducing income levels for new retirees. Whilst existing retirees, whose income is often at least partly fixed, have been squeezed by a combination of low interest rates, even from the best buy savings accounts, and relatively high inflation.
Stephen Lowe of Just Retirement said: “They (pensioners) know about the state pension, but may imagine that because they own their own homes, often valued at more than the national average, they are not eligible for any further state help.”
Lowe went on to say that pensioners who are struggling to make ends meet are having to look at alternative ways of increasing their income. He said: “The research shows a growing trend for using property assets as a way to generate regular income for day to day living rather than for one-off purchases, such as holidays or home improvements,”
Flat Rate State pension
The new Flat Rate State Pension is designed to help reduce the number of people not claiming Pension Credit, however it will only be available for future retirees, existing pensioners will not be eligible and will continue to face the complexity of the Pension Credit system.