New measures to issue Pension Credit had “little impact,” say DWP

Encouraging poorer pensioners to claim their Pension Credit by automatic payment has had little impact, research from the Department of Work and Pensions revealed today. The new method of paying the credit automatically has only increased take-up by 8.6 per cent.

In order to help more pensioners claim this support, the DWP used their customer information to determine who might be best eligible for Pension Credit and trialled automatic benefit payment to them for twelve weeks.

Minister for pensions Steve Webb said: "We are doing all we can to ensure poorer pensioners get the help they are entitled to, but clearly the current system is not working.

"Despite our best efforts, mass means-testing has failed pensioners. Pension Credit is not getting to over a million people who are entitled to it, despite millions spent by successive governments to encourage take up.

"The goal is for people to retire on a decent income, which is why we will introduce a flat-rate single tier state pension for future pensioners in the next Parliament, set above the level of the basic means test. This will lift more pensioners out of means-testing and ensure they have a decent and secure income in retirement.

"I would encourage all pensioners who think they might be eligible for Pension Credit to give us call to find out."

The DWP research showed that even though pensioners appreciated being informed of benefits they were entitled to, but did not know about – most did not go on to then make a claim.

Even after the after the automatic payment trial, people continued to think they would not be eligible, had a negative attitude towards the claims process, or felt they did not need the additional income.

Other elderly people misunderstood the study, were confused about income and savings thresholds, had health issues or simply forgot.

The DWP has tried to increase Pension Credit take-up with different measures including introducing telephone claims without the need for a signed claim form, working closely with local organisations, and a digital toolkit resource to help those who work with older people identify who might be eligible and explain the application process.

Entitlement to Pension Credit depends on a wide range of personal circumstances including income, capital, disability, caring responsibilities and housing costs.