Shared from The Daily Record
It has been reporrted that cash-strapped older homeowners of State Pension age are missing out on thousands of pounds of extra income by failing to claim their full entitlement to key means-tested benefits delivered by the Department for Work and Pensions (DWP), according to a new report by Just Group.
The retirement income provider’s twelfth annual State Benefits insight report found that of pensioner homeowners entitled to receive benefits, nearly half (49%) were failing to claim with each household missing out on an average of £1,197 a year extra income.
Two in 10 (21%) who were claiming were receiving too little, on average missing out on £1,220 a year income.
Stephen Lowe, group communications director at retirement specialist Just Group, said: “Every year we find meaningful income that would make a real difference to people’s lives is not being claimed.
“The proportion eligible for a benefit is trending lower but more of those people are failing to claim. It raises serious questions about why people in most need of support are not receiving what is rightly theirs.”
The research is based on in-depth fact-finding interviews with clients seeking advice on equity release during 2021.
It shows nearly one in four (24%) were entitled to benefits and of those, nearly half (49%) were not claiming anything and two in 10 (21%) were claiming too little.
Stephen explained: “The first step carried out by specialist equity release advisers from our sister company HUB Financial Solutions is to check if clients are eligible for more income from the State.
“Claiming their full entitlement can give them extra income that will often reduce the amount they need to release or remove the need to release any funds altogether at that time.”
The highest amount of extra income lost was £9,090 a year to a couple in Kent who were receiving some disability and mobility benefits but whom the advisers discovered should also be claiming Guarantee Pension Credit, Savings Pension Credit and Council Tax Reduction.
In total, about one-third of those missing income (30%) were entitled to benefits worth at least £1,000 a year.
Guarantee Pension Credit is the main benefit targeted at helping low-income pensioners. It has the highest take up rate of all the four key benefits with seven in 10 (72%) who are eligible claiming. But those failing to claim are missing out on an average £2,265 extra income per year - the most of all the benefits.
Savings Pension Credit has the lowest take-up rate at just 45% of those who are eligible. Those failing to claim are missing out on £596 a year. Council Tax Reduction is claimed by less than half (47%) of those who are entitled to claim with an average shortfall of £748 a year.
About a quarter of Just Group’s lifetime mortgage enquiries are from those who are yet to reach State Pension Age and become eligible for Pension Credit but who may be able to claim Universal Credit.
Take-up among those eligible is just 43% and the average income they are missing out on is £2,806 a year.
If you would like advice on how equity release can work with your pension income, why not contact us today.
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