Credit where it’s due

Pensioners have been able to claim the new pension credit since April 2003; payments began in October 2003. Its success will be judged by how many of those eligible will actually go through the claims process. It is the problem that bedevilled the predecessor benefits – income support and minimum income guarantee – where less than 70 per cent of those entitled actually claimed them.

So the headline figures on pension credit take-up look impressive – and are certainly being trumpeted as such by ministers and MPs. 

• 62,000 additional households (83,000 individuals) started getting pension credit in January 2004.
• 2.18 million households (2.62 million individuals) are now receiving pension credit.
• 2.33 million people have called the pension credit application line. 
• 700,000 applications have been returned to pension centres since the campaign began.
• The average pension credit award is £43.50 weekly.
• 1.51 million households (1.8 million individuals) receive more money through pension credit.

But the Department for Work and Pensions aims to have 2.4 million households to be on pension credit by April 2004. But this represents only about 70 per cent of those who are entitled to pension credit. To reach all eligible households, the number of recipients would have to be three million.

To hit the lower target of 2.4 million, 110,000 households will need to be added in each of February and March, when only 122,000 were added in December and January combined.

If pension credit really did mean an extra £43.50 per week, this gap in take-up would be truly scandalous. However, the headline figure quoted above is misleading, as it includes the amount that would have been paid via income support. The truth is that at 31 January 2004, the average level of weekly gain per household is a more meagre £11.80. A welcome addition to a pensioner’s budget, of course, but far less than the headline figure. When claiming pension credit, pensioners deserve to be told what the likely outcome will be and not have expectations raised unfairly.

The rising number of calls being made to the application line is likely to increase further as the DWP begins a fresh round of pension credit publicity. National press adverts will be supplemented by inserts in local newspapers in those areas where take-up is judged to be lowest, as well as a round of reminder letters to people who have been sent the pension credit application pack but who haven’t yet responded.

At the same time as the pension credit publicity goes into overdrive, the DWP are also trying to co-ordinate a national campaign on council tax benefit take-up. Many pensioners will be getting two lots of letters urging them to claim what is rightfully theirs – so long as they are willing to go through a means-test, of course.

But reaching the never-never land of 100 per cent pension credit take-up is still a long way off, and even the relatively unambitious 70 per cent looks increasingly over-optimistic.

Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered please write to him c/o Community Care.