Two out of five of the poorest elderly people are missing out on pension credit, but claims are likely to rise as over-75s try to keep the right to free TV licences.
The take-up rate among hard-up pensioners has barely budged for years, with an estimated 1.2million families losing around £2,000 annually – or £2.5billion in total – in 2017-2018.
The Government launched an awareness campaign last month encouraging people to claim the benefit, as many believe they would fail the means test because they already receive a pension, are a homeowner or have some savings.
Benefit for the elderly: Over-75s receiving pension credit can carry on getting a free TV licence from 1 June
Lack of awareness of the benefit, difficulty making a claim and discomfort over asking for help are the main reasons for failing to apply, according to Age UK regarding the latest claimant figures.
The charity is urging those who qualify to claim and offering help to anyone going through the process – pointing out that over-75s receiving it can carry on getting a free TV licence from 1 June.
‘Those who aren’t claiming pension credit or are living just above the pension credit means tested level, are set to face horrible decisions over whether they can afford to continue to watch TV at all from 1st June,’ says Caroline Abrahams, charity director at Age UK.
‘It’s completely wrong to put the oldest people in our society through this. We urge the Government to act now to broker a deal with the BBC to put millions of anxious older people’s minds at rest.’ Read more about free TV licences below.
What is pension credit and how do you claim?
Pension credit is a benefit for the poorest pensioners, and a surge in applications is thought to be underway due to the decision to means test pensioners for the free TV licence, which currently costs £154.50 a year but will rise to £157.50 from 1 April.
What does the Government say?
‘Pension credit is important to some of our most vulnerable people, and we want everyone eligible to claim,’ said a Government spokesperson.
‘Around 1.6 million older people receive extra help through pension credit, but too many are missing out. We encourage everyone who thinks they might be eligible to check.
‘On TV licences, we’re disappointed with the BBC’s decision and have been clear we wanted and expected them to continue the concession.’
It comes in two parts – guarantee credit and savings credit.
Guarantee credit pushes up your income to £167.25 if you are single or £255.25 if you are a couple.
You may be eligible if you have reached state pension age and your income is less than these amounts, even if you own your own home.
A separate savings credit element is available to people who reached retirement age before April 2016.
There isn’t a limit on how much you have in savings, but if you have over £10,000 you will receive less money.
A controversial rule change last May tightened eligibility requirements for pension credit.
Couples where one partner is above state pension age and the other is younger can no longer claim pension credit – or a string of other linked benefits – until the second reaches official retirement age too.
If you claim, you can get help with the following:
– Council tax, which might be waived unless others live with you
– Free NHS dental treatment, plus help towards the cost of glasses and travel to hospital
– Cold weather payments
– Help with rent
– Extra money if you are a carer.
Read more here on how to claim. Age UK says any older person who thinks they might be entitled to pension credit can contact its free advice line 0800 169 6565 or visit www.ageuk.org.uk/money for information.
Around 60% of eligible people claim pension credit
Pension credit: What is the take-up level and how much of available funds is claimed? (Source: Department for Work and Pensions)
Why are free TV licences being axed for over-75s?
Charter renewal negotiations between the Government and the BBC in 2015 safeguarded the licence fee system for funding the broadcaster.
But as part of the deal, the BBC agreed to take over responsibility for bankrolling free licences for the over-75s. This would cost it an estimated £745million in 2021/2022 alone, and force it to drastically cut services.
It has therefore announced plans to ditch the free perk for an estimated 3.7million people from June 1 2020, while around 1.5 million households will remain eligible if they claim pension credit.
The Government might end up having to pay out hundreds of millions of pounds more in unclaimed pension credit and associated benefits as a result of handing responsibility for funding free licences to the BBC, and the ensuing publicity around its new means-testing rules.
If the number claiming the benefit rises, there will also be fewer over-75s paying the licence fee and helping to fund the BBC’s services.
Age UK delivered a 630,000-signature petition to the Government six months ago, calling on it to carry on funding the perk to prevent the BBC or pensioners having to shoulder the cost, but says it has received no response.
TV licence: It currently costs £154.50 a year but price will rise to £157.50 from 1 April
What do the Government and BBC say?
A Government spokesperson said of the BBC’s move at the time: ‘We’re very disappointed with this decision – we’ve been clear that we want and expect the BBC to continue this concession.
‘People across the country value television as a way to stay connected, and we want the BBC to look at further ways to support older people.
‘Taxpayers want to see the BBC using its substantial licence fee income in an appropriate way to ensure it delivers for UK audiences, which includes showing restraint on salaries for senior staff.’
A BBC spokesperson said: ‘We appreciate that people feel strongly about this issue, and recognise that many people have signed the Age UK petition calling on the Government to restore funding for free TV licences.
‘We know pensioner poverty is an important issue, and that’s why we’re ensuring the poorest older pensioners continue to get a free licence, while avoiding the closure of major services which would be necessary if we were to meet the £745million-a-year cost.
‘We have written to charities and older people’s groups to work together to ensure the poorest older pensioners know how to claim pension credit.
‘We hope that pensioners will consider claiming as they could then be eligible for around £2,500 and other benefits as well as a free TV licence.’
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