Pensioner homeowners are missing out on thousands of pounds by failing to claim their full entitlement to key means-tested State Benefits but guarantee pension credit was found to have the highest-take up rate of all benefits.
According to Just Group’s twelfth annual State Benefits insight report, guarantee pension credit has the highest take-up rate of any of the four major benefits, with seven out of ten, or 72 per cent, of those who are eligible claiming. But pensioners who do not claim lose an average of £2,265 in extra income per year, with the highest reported income loss from not claiming guarantee pension credit being £9,090.
Based on fact-finding interviews with clients seeking equity release advice in 2021, the report found that 49 per cent of pensioner homeowners eligible for benefits did not claim, costing each household an extra £1,197 per year and 21 per cent are losing an average of £1,220 per year, received insufficient benefits.
Savings pension credit has the lowest take-up rate, with only 45 per cent of those who are eligible participating. Those who do not file a claim lose £596 per year. Council tax reduction is claimed by less than half, or 47 per cent, of those eligible, with an average shortfall of £748 per year.
Just Group communications director Stephen Lowe says: “Every year we find meaningful income that would make a real difference to people’s lives is not being claimed. The proportion eligible for a benefit is trending lower but more of those people are failing to claim. It raises serious questions about why people in most need of support are not receiving what is rightly theirs.
“The first step carried out by specialist equity release advisers from our sister company HUB Financial Solutions is to check if clients are eligible for more income from the State. Claiming their full 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.
“Our insight broadly reflects government figures which show that take-up of guarantee pension credit is 70 per cent and savings credit 42 per cent overall. For the two elements of pension credit, the government estimates up to a million households are failing to claim up to £1.8 billion or around £1,700 each. Couples are less likely to take up their entitlement than single people and the over-75s are less likely to claim than younger pensioners.”
According to Lowe, the findings raise new concerns about the support and guidance available to those struggling to make ends meet, particularly homeowners.
“It reinforces the message that benefits information is integral to retirement guidance and that those struggling for income should check if they are missing out which many fail to do. Our research last year found nearly half (44 per cent) of homeowners aged over-65 had never checked their entitlement to State Benefits compared to just 16 per cent who are renting.”
