6 in 10 pensioner homeowners eligible for benefits failing to claim

Pensioner homeowners are missing out on thousands of pounds of extra income by failing to claim their full entitlement to key means-tested State Benefits, according to new analysis by Just Group.

With the government focusing targeted financial support during the cost-of-living crisis on households receiving means-tested benefits, failing to claim could mean missing out on hundreds of pounds of additional tax-free payments in the coming months.

Just Group’s report found that of pensioner homeowners entitled to receive benefits, six in 10 (62%) were failing to claim any benefit with each household missing out on an average of £1,100 a year extra income. One in four (24%) were claiming but receiving less than their entitlement, on average missing out on an additional £660 a year income.

The research from Just Group, is based on in-depth fact-finding interviews with clients seeking advice on equity release during 2022. It shows 28% were entitled to benefits. Of those, six in 10 (62%) were not claiming anything and nearly one in four (24%) were claiming too little.

The highest amount of extra unclaimed income found was £79.76 a week for an octogenarian from Hertfordshire who was receiving no benefits. Advisers found he was eligible for £51.86 a week Pension Credit and £27.90 a week Council Tax Reduction – adding up to a huge £4,147 a year extra income.

In total, four in 10 (40%) of those missing out on income were entitled to benefits worth at least £1,000 a year. 62% of those eligible to claim were missing just one of the key pensioner benefits and 9% were missing out on two benefits.

Latest official figures show that take-up of Guarantee Pension Credit is 73% and Savings Credit 43% overall in 2019/202. Government estimates suggest 850,000 families entitled to receive Pension Credit did not claim, totalling about £1.7 billion or around £1,900 a year.

Stephen Lowe, group communications director at Just Group, said: “Every year the figures consistently show the huge amounts of benefits that are going unclaimed but would make a massive difference to those struggling, especially with the added pressure of soaring living costs.

“This year the amounts unclaimed are down a little on recent years, but the proportion who aren’t getting their entitlements has risen. That’s particularly worrying because it means many could miss out on the extra tax-free Cost of Living Payments next year, worth up to £900, available for those claiming means-tested benefits.

“About three in 10 households in our survey are eligible for one of the key benefits available to pensioners, but the majority are not claiming and those who are claiming often don’t get their full entitlement.

“Ensuring they claim their full benefits entitlement can give them extra income that will often reduce the amount they need to release or remove the need to release any funds altogether at that time.”

“The reason our take-up figures are a little worse could be that homeowners struggling on low incomes may think the value of their home rules them out of State support. Our own research in 2021 found 44% of homeowners aged 65+ had never checked their entitlement to benefits compared to 16% of renters.

“Benefits information is integral to retirement guidance and messages that a range of benefits are available to help people who later in life are in poor health or find themselves struggling for income should be reinforced during any guidance provided.”