This week, I along with my fellow MPs have been working to publicise the “Pension Credit Week of Action” – raising awareness of Pension Credit and encouraging people to check their eligibility and make a claim.
This got me thinking about pensions in general and I was interested to learn that the Old Age Pensions Act was passed in 1908, with first payments made on 1 January 1909. It had stringent means testing; you had to be 70 (quite a feat in 1909), poor, and of good character – meaning you could not be habitually drunk, been in prison in the previous ten years or had never worked when able to do so. Before 1909, people depended on saving for their old age with Friendly Societies, or their only resort might have been the workhouse. Since 1909, pensions have evolved, with the biggest change in 1948 when the modern State Pension system was introduced; available to all and paid for by workers and employers through national insurance contributions.
Pension Credit was introduced in 2003, replacing the Minimum Income Guarantee as the main means-tested benefit for pensioners. It is not automatic, and pensioners need to claim it.
Pension Credit provides vital income for our most vulnerable pensioners – averaging more than £3,500 per year. Although take-up is at the highest level since 2010, there is still more we can do to ensure pensioners are not missing out. There are 23,196 pensioners in Hastings and Rye, and it is good news that, by this Government protecting the triple lock, they have received a 10.1% pension increase with the State Pension exceeding £10,000 for the first time this year. However, only 3,459 H&R households are receiving Pension Credit as at November 2022. Pension Credit tops up weekly income to a guaranteed minimum level of £201.05 a week for single pensioners or £306.85 for couples. It is a tax-free payment for those who have reached Pension Credit qualifying age (which is State Pension age) and live in Great Britain.
I want to improve local uptake of Pension Credit and am asking everyone to spread the word to encourage pensioners to come forward, even if they think they might not be entitled to it. It is vital to get the message out because just a small award of Pension Credit can open doors to additional help and support – including help with housing costs, council tax, heating bills, a free TV licence for over 75s and, crucially this year, extra cost of living payments. One of the common misconceptions that might deter people from claiming Pension Credit is that you cannot claim it if you have modest savings, or a retirement income or own your own home. This may not be the case and it is worth checking if you are eligible; you may still be able to get Pension Credit even if you have not paid National Insurance contributions, have savings or a small pension, or live with your grown-up family or own your own home.
It is also worth checking that your state pension is not being underpaid. Unfortunately, mistakes can be made by many institutions, and the Department of Work and Pensions is no different. Official DWP data shows that state pension underpayments amounted to £670 million last year with ‘official error’ being the main cause. These mistakes primarily affect women who retired before 2016 under the old state pension system, who were entitled to uplifts in their pension when their husbands retired or died. Many of these underpayments go back a number of years and amount to thousands of pounds. The DWP is working to rectify these underpayments and trace those affected, but this will take time. If you're comfortable using a computer, the quickest way to find out if you qualify for pension credit is by using the Government's free pension credit calculator at www.gov.uk/pension-credit-calculator. If you have any concerns or questions about your pension for whatever reason, you should contact the Pension Service at www.gov.uk/contact-pension-service or call 0800 731 0469.
As retirement approaches, pensioners are entitled to the well-earned benefits that come with it. Please help spread the word to encourage pensioners to check if they could be eligible for Pension Credit. It could make a real difference to your retired loved ones.