The cost of low uptake of Pension Credit

September 15, 2020

New research commissioned by Independent Age has found that low uptake of Pension Credit is costing health and social care systems around £4bn per year.

Pension Credit, a benefit designed to keep the least well-off pensioners out of poverty, is currently being received by just six in 10 (61%) of those who should be receiving it.

This new research comes from the Centre for Research in Social Policy at Loughborough University, and has been commissioned and published by Independent Age. The low uptake of Pension Credit is creating significant knock-on effects for the NHS and social care, with the cost to taxpayers an estimated £4bn per year, significantly higher than the annual cost of pensioners receiving the £2.2bn to which they are entitled.

The report's authors, Professor Donald Hirsch and Dr Juliet Stone found that the NHS bears the brunt of the additional demand, with pensioners on a low income likely to need more health services, such as prescriptions or the use of a hospital bed. The resulting costs to healthcare systems are estimated to be between £3.02bn and £4.81bn per year.

Those missing out on Pension Credit are also more likely to need social care, incurring additional costs to the state of between £66m and £189m per year.

The report concluded that if this low Pension Credit uptake was handled so that 100% of those entitled were claiming it, then almost 450,000 pensioners could be lifted out of poverty, reducing pensioner poverty to its lowest ever level, and resulting in substantial savings to the NHS and social care systems over the long term.

Chief Executive of Independent Age, Deborah Alsina MBE, said the report provided even more justification for the Government to take urgent action on improving the woefully low uptake of Pension Credit.

She says, 'What we can see from this report is that ensuring the poorest pensioners have a livable income is not only the right thing to do, it’s the economically responsible thing to do.

'The Government needs to urgently create an action plan that contains high-quality, up-to-date research into who is not claiming Pension Credit and why they are not receiving it. There needs to be recognition of the active role the Government must to play to increase Pension Credit take-up.'

The full report is available on the Independent Age website.


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