According to older people's charity Age UK, nearly three million people over 65 are struggling financially, while government figures show that 1.9m pensioners live below the poverty line. Despite this, the benefits targeted at older people are the most likely to go unclaimed.
The government estimates that up to 1.4 million pensioners do not claim one of the most important benefits for the retired - Pension Credit - with up to £3.1 billion unclaimed every year. The average amount unclaimed is significant – £2,000 per family, according to the Department for Work and Pensions. Other benefits that also go unclaimed by older people include housing benefit and council tax benefit.
David Samson, welfare benefits expert at the Turn2us benefits advice service, run by the Elizabeth Finn Trust, says that many pensioners are not aware of the financial support available to them. “For example, they may be getting their state pension but not be aware that they are entitled to pension credit,” he says. “The rules for pension credit are more generous than the rules for working people, so they may have an entitlement that they don’t realise.”
"It’s important to get the message out there as we know that claiming the correct benefits can make a huge difference to quality of life."
Caroline Abrahams, charity director at Age UK, says: “Despite millions of older people struggling financially, around £3.5 billion in money benefits remains unclaimed every year when this extra income could make a huge difference to their lives.”
The benefits that are on offer change as you get older – with some available to people as young as 50 years old. Help is available to ensure that you claim what you are entitled to.
Here is an overview of what you can claim when you reach state pension age.
Benefits at state pension age
Eligibility for many benefits kicks in when you reach the age when you can receive your state pension. Confusingly, though, this age is changing gradually and can be different for men and for women.
The age at which you can claim your state pension now depends upon your gender and your date of birth. If you are a woman and were born before 6 April 1950, your state pension age remains 60. If you are younger than this, your state pension age will be greater than 60. If you were born on or after 6 April 1950 but before 6 December 1953, your State Pension age will be somewhere between 60 and 65, depending on your date of birth.
If you were born on or after 6 December 1953 but before 6 April 1978, your State Pension age will be somewhere between 65 and 68 depending on your date of birth. If you were born on or after 6 April 1978, your State Pension age will be 68.
For men born before 6 December 1953, the state pension age is 65. For those born after this date, state pension age rises at the same rate as for women If you are unsure about when you will reach this age, the calculator at gov.uk/calculate-state-pension will give you an exact date.
Once you reach your state pension age you may be eligible for the following:
If you are an older person on a low income you may be able to claim Pension Credit to top up your state pension. This is available for women when they reach state pension age. Men can apply for Pension Credit when they reach the state pension age as a woman born on the same day as them.
Pension credit comes in two parts, known as Guarantee Credit and Savings Credit, and you may be eligible for one or both.
However, Savings Credit, is being phased out. Most people who reached State Pension age on or after 6 April 2016 won’t be eligible for Savings Credit, unless they are in a couple and the other member of the couple reached pension age before that date.
Guarantee Credit tops up your weekly income to a guaranteed minimum level of £163 if you are single or £248.80if you are a couple. You might get more if you're a carer, severely disabled or have certain housing costs.
Savings Credit is extra money if you've got some savings or your income is higher than the basic State Pension. If you are entitled to it, you could receive up to £13.40 extra per week if you're single or up to £14.99 if you're in a couple.
The Pensions Credit calculator at gov.uk will help you to see how much you might be eligible for. Don't be put off claiming even if you are only entitled to a small amount – being in receipt of Pension Credit is a passport to other benefits, so is worth having.
Your entitlement to Housing Benefit and Council Tax Reduction will also be worked out differently once you've reached State Pension age, so you may become entitled to these benefits even if you weren't before. If you receive the Guarantee Credit portion of Pension Credit, you're entitled to free dental treatment, vouchers towards glasses and contact lenses, wigs, and help with the cost of travelling to hospital. You may also get your council tax paid in full.
Cold weather payment
If the average temperature has been‚ or is expected to be‚ 0°C or below for seven days in a row (between 1 November and 31 March) and you are in receipt of Pension Credit, you will automatically receive a Cold Weather Payment of £25 a week.
Winter fuel allowance
Once you have reached state pension age (or if you are a man, the state pension age of a woman born on the same day as you), you are eligible for Winter Fuel Allowance to help you to heat your home. You only need to claim for this once, and then should get it automatically. Winter Fuel payments are £200 if you're under 80 and £300 if you're 80 or over.
For information, call the Winter Fuel Payments Helpline on 0800 731 0160.
Winter fuel payment is not means tested and you will receive it whether or not you receive Pension Credit. You only need to apply once, and it will be paid automatically in subsequent years.
Carer's Allowance and the State Pension
Carer's Allowance is worth £64.60 a week and helps you look after someone with substantial caring needs. You don't have to be related to, or live with, the person you care for but you do need to spend at least 35 hours a week caring for them.
Recipients can choose to be paid either weekly (in advance), or every four or 13 weeks. It's worth noting that Carer's Allowance is classified as taxable income, and it can therefore affect your other benefits (for example, if it pushes your level of income over the threshold below which you are due certain other benefits), such as Pension Credit. However, Carer’s Allowance does not count towards the benefit cap.
Usually, for each week you get Carer's Allowance or the underlying entitlement, you can also get National Insurance credits The credit may also help you build up some additional pension, sometimes called State Second Pension, but only for those who reached State Pension age before 6 April 2016. The credits help to fill in gaps in your National Insurance record (which means you'll still be able to receive the full State Pension and other benefits) although they will stop being paid in the tax year you reach State Pension age.
Because you can't normally get two income-replacement benefits (such as, say, Carer's Allowance and State Pension) paid together, an 'overlapping benefit rule' can come into play. If you can't be paid Carer's Allowance because of this rule, you have 'underlying entitlement' to Carer's Allowance instead. It's a tad confusing but it might mean you could get the extra amount for carers in Pension Credit.
If you're in any doubt, visit gov.uk, speak to a government benefits adviser or contact Citizen's Advice.
- Visit turn2us.org.uk for a benefits calculator or call the freephone helpline on 0808 802 2000.
- Contact ageuk.org.uk for advice specifically aimed at older people or call the freephone number 0800 169 2081.
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