Pension Credit not working for 10% of nation's poorest pensioners forced into debt

26 September 2008 / by Rachael Stiles
One in 10 of the UK's poorest pensioners are being forced into debt as a result of the rising cost of living, according to new research from charity Age Concern, despite the introduction of the Government's flagship Pension Credit.

Age Concern has found that even though five years have passed since the Government rolled out the Pension Credit scheme, a third of those pensioners who are eligible are still missing out on the benefits they are entitled to.

The charity is urging the Government to introduce a new system which will receive those eligible receive payments automatically, in the hope that this will help to boost take-up by overcoming the "deeply ingrained barriers to claiming benefits".

More than half of the UK's pensioners admit to cutting back on essentials such as heating and food as both become increasingly expensive, and Age Concern wants to see more assistance for those who are finding that their pension isn't stretching far enough and are struggling to cope with escalating household bills.

The report, Flagship or Flagging, has revealed that 60 per cent low income pensioners are only just managing to get by or are finding it very difficult to manage in their current financial situation.

Two thirds have had to cut back on the amount of gas and electricity they use, half have been forced to buy less or poorer quality foods, and a similar number intend to cut back on heating their homes this winter in order to make their money go further.

Pension Credit has made some impact however, with 82 per cent of pensioners saying that it has made a noticeable difference to their financial situation, and more than half are worrying less about keeping up with bills as a result. Nearly all claimants would recommend claiming it to others.

But one in six pensioners have still not heard of Pension Credit, and 70 per cent think that automatic payments would make a dramatic improvement to the process of receiving benefits. Currently, up to £2.8billion of Pension Credit remains unclaimed by 1.8 million pensioners, who would be an average £1,477 a year better off if they claimed it.

Gordon Lishman, director general of Age Concern, thinks that "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." he argued. "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 is urging pensioners who have not already claimed their Pension Credit to do so as soon as possible to avoid losing out on reductions in backdated payments, starting in October. They can contact Age Concern on 0800 00 99 66 for more information on the benefits available to them.

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