Pension Credit from the DWP is a key benefit aimed at supporting older adults on low incomes.
DWP told to overhaul key perk which 1.3 million state pensioners receive
The Labour Party government and Department for Work and Pensions ( DWP ) has been urged to implement significant reforms to Pension Credit. Pension Credit from the DWP is a key benefit aimed at supporting older adults on low incomes.
But the Labour Party government has been urged to shake the system up – if it hopes to effectively address pensioner poverty across the country. Pension Credit, currently claimed by around 1.3 million people, is intended to boost the incomes of pensioners whose financial resources fall below a minimum threshold.
However, a new report from the cross-party Work and Pensions Committee highlights serious concerns about both the fairness and accessibility of the scheme. The committee warns that more robust efforts are needed to increase uptake and ensure the benefit reaches all those who are entitled to it.
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Despite offering up to £4,000 annually, Pension Credit has consistently low take-up rates, with participation stagnating between 61% and 66% over the past ten years. The committee estimates that approximately 700,000 eligible households are still missing out on the support, leaving many vulnerable pensioners without the financial assistance they need.
A taper to pension credit should also be considered to “mitigate the cliff-edge effect” for those who currently miss out, it added. Committee chairwoman Debbie Abrahams said: “To boost incomes, the Government needs to come up with a strategy to increase pension credit take-up. It’s a scandal that so many have missed out for so many years, often through an aversion to claiming benefits altogether, or lack of support.
“The fairness of the pensions credit eligibility criteria where if you are a penny above the threshold, you miss out on thousands of pounds, also needs to be looked at.
“Ultimately, the Government should decide what it thinks is enough for a dignified retirement, and then work to ensure that all pensioners are on at least that level.
A government spokesperson said: “Supporting pensioners is a top priority, and thanks to our commitment to the Triple Lock, millions will see their yearly State Pension rise by £1,900 this parliament. We have also run the biggest-ever campaign to boost Pension Credit take-up, with nearly 60,000 extra pensioner households being awarded the benefit, worth on average around £4,300 a year.
“But we know there is a real risk that tomorrow’s pensioners will be poorer than today’s, which is why we are reviving the Pension Commission, to tackle the barriers that stop t