Pension credits under fire

The government's policy on council tax benefit and pension credit is failing the UK's pensioners, leading charities said today, as official figures showed thousands had missed out on money to which they were entitled.

Figures published today by the Department of Work and Pensions (DWP) show that in the first six months after pension credits were introduced in October 2003 only 58-66% of those eligible to claim the credits had taken them up.

Over that period, up to £2.3bn worth of credits went unclaimed, and between 1.26 and 1.84 million pensioners - over half aged over 75 - missed out on the payments, which are designed to ensure all those over 60 have an income of at least £109.45 a week.

And there was evidence that an increasing number of pensioners were also missing out on council tax benefit, with between 41 and 47% of those entitled to the payments failing to receive them.

Take up of the benefit was down at least 10% on that in the 1997/98 tax year.

Commenting on the figures, Help the Aged said it was time for the government to put an end to means-tested benefits for older people.

The charity's spokeswoman, Anna Pearson, said: "Government targets on pension credit are now unlikely to be met on present rates of new applications. And all this while over 2 million older people struggle to make ends meet each and every day in life below the poverty line.

"Instead of offering warm words on pensioner poverty, it's now time for the government to end unfair means-testing on benefits so as to drive up take-up rates.

"Automatic payment of council tax benefit should be considered as a priority and a decent pension paid to ensure dignity for people in older age."

The director general of Age Concern England, Gordon Lishman, said it was shocking that up to £4.1bn may be sitting unclaimed while one in five pensioners live in poverty.

He added: "Immediate action must be taken to tackle the problem of under claiming, and in the longer-term, we need a higher basic state pension that reduces the need for means-tested benefits."

However the DWP said it was important to remember the figures were from the early days of the pension credit and that work had been done since then to increase pensioners' awareness of the system.

The minister for pension reform, Stephen Timms, said: "The figures published today relate to the first six months of pension credit take-up when we were focusing our efforts at getting money into the pockets of the least well-off pensioners.

"As the statistics show, this was successful with a take-up rate of 81% amongst those in the most urgent need."

Mr Timms claimed that almost 2 million pensioners have been lifted out of poverty thanks to initiatives such as pension credit and acknowledged there was more to do.

"We are determined to reach those who are entitled but not claiming. That is why this year the Pension Service will make 800,000 visits to pensioner households to help them claim all their benefits."