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Pensioners on low incomes are being urged to check if they can claim an additional welfare benefit as data shows 850,000 eligible households are missing out amid the deepening cost-of-living crisis.
The Local Government Association (LGA), which represents councils in England and Wales, has warned that only a third of eligible households are currently claiming pension credit.
Figures from the Department for Work and Pensions (DWP) reveal unclaimed pension credit amounts to an average loss of £1,900 per year for families entitled to it – an estimated £1.7bn overall.
Some 2.1 million (18%) of pensioners in the UK live in poverty, an increase from 1.6 million (14%) in 2013/14.
Eligible people failing to claiming the credit could now also miss an extra £650 from the government's cost-of-living support package for those on means-tested benefits.
Councillor Andrew Western, chair of the LGA’s resources board, said: “People across the country, including our oldest and most vulnerable, are feeling the pressure from rising prices and bills with some really struggling to make ends meet.
“Councils want to do all they can to help those most in need, including encouraging anyone who is eligible to receive the benefits they are entitled to and not miss out on essential support which could make all the difference."
On Wednesday, Pension Credit Awareness Day, Money Saving Expert Martin Lewis also urged pensioners to check their eligibility.
"If you're of state pension age, that's 66 or over, and you've got total income under £200 a week, you should definitely either get online to check or call up the pensions credit claim line," he told Good Morning Britain.
What is pension credit?
The benefit comes in two parts:
Guarantee credit: tops up weekly income to a minimum level of per £182.60 if you are single, or £278.70 if you are in a couple.
Savings credit: additional money if a person has savings or income higher than the basic state pension if they reached state pension age before 6 April 2016. This could amount to to £14.48 for a single person, and £16.20 extra per week for a couple.
How to check if you’re eligible
If a person is over state pension age, on a low income, and lives in the UK they may qualify for pension credit. You can start your application up to four months before you reach state pension age.
Other benefits like attendance allowance, Christmas bonus, child benefit, disability living allowance (DLA), personal independence payment (PIP), the winter fuel payment, and housing benefit do not count as household income.
A state pension, other pensions, earnings from employment and self-employment, and most social security benefits – like carer’s allowance – are classed as a form of income.
The amount of savings you have can also affect how much pension credit you can claim. For every £500 you have over £10,000, you lose £1 per week. For example, if you have £11,500 in savings that would knock off £3 in pension credit payments per week.
If your income is higher than the cut-off rate for pension credit, you might still be eligible if you have a disability, you care for someone, or you have housing costs.
You’ll need the following information about you and your partner (if you have one) to apply for pension credit:
National insurance number
Information about any income, savings and investments
Information about your income, savings and investments on the date you want to backdate your application to – usually 3 months or the date you reached state pension age
There are a variety of online resources to help calculate what benefits you are entitled to which can be found via the government website here.
Watch: Cost of Living payment: Who is eligible and when will the first half of the £650 payment be issued?