Claim pension credit if you are eligible, and receive at least £173.75 a week

Hard-up elderly people are being urged to apply for pension credit to boost their income, as the number in poverty soars to 2.1million.

Black and Asian older people are most at risk of struggling to make ends meet in later life, while over-85s, renters, and single female pensioners are also among those more likely to have strained finances, according to the charity Age UK.

Pension credit boosts weekly income to at least £173.75 if you are single and to £265.30 for couples, but you can gain up to £12,000 a year on top via help for housing, heating, council tax, TV licences and other bills.

Pension credit: Hard-up elderly people are being urged to check their eligibility

Reasons for not claiming include lack of awareness, worry about filling in long forms, reluctance to disclose personal information, feeling others are worse off than you are, or being determined not to ask for help, says Age UK.

This means an estimated 920,000 pensioner households are missing out on pension credit payments worth up to £1.6billion a year, according to Government figures.

>>>How do you apply for pension credit? Find out below

Meanwhile, the number of pensioners in poverty has risen by 31 per cent from 1.6million in 2013-14 to 2.1million in 2019-2020.

Being poor is defined as living in a household on less than 60 per cent of median income after housing costs. In 2019-2020, the median income after housing costs for a couple was £476 per week or around £24,900 per year.

Median means the middle of the income range of UK workers, and this is used instead of the average because a small number of very high earners can skew the results.

Age UK explains that poverty is a relative measure, and as average household incomes were broadly increasing in the years up to 2019-20, there was an increase in the number of pensioners falling below the poverty line.

Some 33 per cent of Asian older people and 30 per cent of black older people in the UK live below the poverty line

Some 33 per cent of Asian older people and 30 per cent of black older people in the UK live below the poverty line

That means the incomes of poorer older people have not kept pace with the overall rise in household incomes.

Government figures reveal that 33 per cent of Asian older people and 30 per cent of black older people in the UK live below the poverty line, compared with 16 per cent of white older people.

Caroline Abrahams, charity director at Age UK, says: ‘The numbers of older people living in poverty have risen steadily in the last few years, so they now top two million.

‘That’s a lot of older people worried sick about how they’ll cope if their heating or their cooker breaks down and needs replacing, more than the entire populations of Newcastle and Liverpool put together.

‘It’s sad to realise that the burden of poverty in old age is falling disproportionately on black and Asian older people in our society at the moment.

‘For their sake and, indeed, for the sake of anyone forced to scrimp and save in their later years, we should do everything possible to raise their incomes, so they can enjoy the dignified and comfortable retirement they deserve.

‘It’s deeply frustrating that the money is available to top up the incomes of pensioners who live on the lowest incomes but that much of it goes begging every year because many never claim what is rightfully theirs.’

Former Pensions Minister Ros Altmann recently urged people meeting up with elderly relatives and friends after lockdown to help them apply for pension credit if you find out they are struggling financially. 

She welcomed the Age UK campaign to promote increased take-up of pension credit, saying: ‘Workers and businesses have rightly received Government furlough money to help them afford to live during the pandemic.

‘However, pensioners have continued to miss out on money they are entitled to, because they do not claim pension credit.

How to apply for pension credit 

You can apply yourself by phone, online or by post, or a friend or family member can do this on behalf of an elderly person.

You can call 0800 99 1234, claim online here, or find out how to apply by post here.

Charities also have further useful information. Age UK offers help here and the Citizens Advice Bureau here.

‘Pension credit take-up is lowest of all means-tested benefits – 40 per cent do not claim.

‘It is well-known that pensioners find form-filling off-putting, are often too proud to apply for help, or wrongly believe they are not eligible.

‘They may not realise that they could have up to £10,000 in savings, but still be eligible for small amounts of pension credit and these can lead them to be entitled to many other valuable benefits, worth thousands of pounds a year.

‘Great to see Age UK working on this to spread the word and I encourage everyone who knows older people to suggest they check their eligibility.’

Myron Jobson, from Interactive Investor, says official statistics on household wealth by ethnicity show that almost across the board, people of colour were worse off than their white counterparts, but one of the standout findings was the ethnicity pension disparity.

‘The median private pension value was £80,000 for White British groups but less than £5,000 for Bangladeshi, Black African, Chinese and any other ethnic groups.

‘The Office for National Statistics said that disparities in employment rates and earnings will contribute to the ethnicity pensions gap, but also points to a pensions knowledge gap and the likelihood of participating in available schemes being lower among some ethnic minority groups.’

Jobson says there is an ethnicity pension chasm – not gap – that needs to be addressed, akin to efforts rightly made to address gender inequalities.

‘The first step is understanding the experiences and expectations that are unique to different communities. 

‘However, lack of research is an ongoing motif when it comes to exploring how attitudes and experiences among BAME [Black, Asian, and minority ethnic] communities might affect their access to, and use of, financial services.’

II is currently carrying out its latest Great British Retirement Survey, and Jobson says that last year it attracted over 12,000 respondents but there wasn’t a big enough sample from BAME communities to draw many meaningful conclusions.

The survey is open until 30 June and you can take part here.

‘I don’t pay council tax anymore – I was paying about £1k a year’ 

People who call the Age UK advice line on 0800 678 1602 can receive a free benefits check. The charity was contacted by Pam, 75, who tells her story below.

I’ve had really bad periods when I can’t even open the bills, the letters. It’s been that bad, and I’ve had to wait for my daughter to come, and she’s had to go through everything.

I was struggling financially a bit. I have a state pension and a small one through the county council. A lady from the Age UK Advice line said: ‘I can get someone to ring you to do a benefits check for you.’

So then I got the call from a lady at Age UK Lincoln. I never dreamed at any point that with my income that I was actually entitled to any benefits. She did a benefits check for me and helped me fill the forms in.

I now get attendance allowance and pension credit – which is an extra £51 a week, but it’s the other benefits that come with it too. 

I don’t pay council tax anymore – even with a quarter discount off, I was still paying about £1,000 a year, which is a huge amount of money. And now I’m 75, I get my free TV licence. Without Age UK, I wouldn’t have known about any of that.

Having the Age UK benefits check has made a huge difference to my life. With that little bit of extra money, it’s enabled me to buy things that make my life easier.

I’ve got a better shower chair – it’s much safer. When everything opened up last time, I had a chiropodist come to do my feet which I could never have afforded.

I don’t worry so much about my bills now, and that is a huge thing when you suffer with depression, anxiety, and low mood sometimes. When those letters come, I just can’t deal with them, and so as a result of the Age UK benefits check, it’s taken away any worries about anything.

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