At the stroke of midnight on Saturday, the deadline for pension credit claims passed, meaning those who missed out will lose their winter fuel payment. Pension credit, designed to assist low-income pensioners with living costs, is now the gateway to this allowance. Yet up to 880,000 older people entitled to pension credit do not claim it. They are part of a wider trend: last year, a total of £23bn in benefits and social support went unclaimed across the UK.
Means-testing the winter fuel payment by linking it to pension credit makes financial sense, as fewer pensioners live in poverty today than when the allowance was introduced in 1997. The pension triple lock will increase most pensioners' incomes by up to £472 a year from April 2025. However, the change saves the government around £1.3bn, creating an obligation to raise the pension credit threshold to include those living just above it. Qualifying for even a small amount of pension credit opens access to a free TV licence, housing benefit, reduced council tax, and help with NHS costs.
The government has urged people to claim, and the Department for Work and Pensions has hired an extra 500 staff to clear the backlog. Yet even when benefits are claimed, Britain's system leaves 14.4 million people below the official poverty line, including 2.1 million pensioners and one in three children. Citizens Advice reports that 5 million people live on 'negative budgets', where their income after benefits still falls short of basic costs for housing, energy, water, and food.
Barriers to claiming include ignorance, mental illness, semi-literacy, fear of rejection, and difficulty applying online. For example, only about 60% of eligible families claim Healthy Start money for young children's milk and food, worth up to £1,000 a year. Similarly, 800,000 students miss out on free school meals, and only 5% of low-income households sign up for discounted broadband tariffs. Policy in Practice, a social policy analytics company, has software that uses DWP and council tax records to identify those owed benefits. About 60 local authorities already use this service, and a national rollout could help recover the £23bn in unclaimed support.
