Nearly half of pensioner homeowners not claiming benefits: Are you missing out?

8 min Read Published: 17 Jan 2022

Pension benefitsRetired homeowners in the UK are missing out on thousands of pounds each year by failing to claim their full entitlement to several means-tested benefits, according to a new report by retirement specialist Just Group. In this article, we look at the findings from the annual report, the main benefits pensioners are missing out on, and how to find out which ones you or people you may know are eligible for.

Just Group State Benefits annual report

Just Group’s annual customer insight report is based on interviews with clients seeking advice on equity release during 2021. It shows that nearly 1 in 4 (24%) were entitled to benefits, but many were failing to take advantage of them. Nearly half (49%) of eligible retired homeowners were failing to claim any benefits, resulting in £1,197 a year being lost on average. A further 1 in 5 (21%) were underclaiming and missing out on £1,220 of extra annual income. The proportion of eligible pensioners claiming benefits had also fallen in 2021 for the first time in 3 years.

The report found that a couple in Kent were missing out on the highest amount of extra income at £9,090 a year. They were receiving some disability and mobility benefits but were also eligible for Guarantee Pension Credit, Savings Pension Credit and Council Tax Reduction. In total, Just Group discovered that about one-third of those missing out on extra income (30%) were entitled to benefits worth at least £1,000 a year. The table below shows how eligibility and the proportion of benefits claims have evolved over recent years. ‘Key benefits’ refers to Guarantee Pension Credit, Savings Pension Credit and Council Tax Reduction.

Pension benefits - Eligibility and claims stats

2021 2020 2019 2018 2017
Entitled to claim at least one of the key benefits 24% 33% 40% 42% 41%
Of those who are entitled, % failing to claim any benefit 49% 42% 46% 49% 42%
Average annual loss from failing to claim £1,197 £1,137 £1,423 £1,139 £545
% of those who are claiming but not claiming full benefit 21% 20% 18% 20% 19%
Average annual loss from underclaiming £1,220 £702 £2,102 £855 £2,032
Overall average annual value of missing benefits £1,204 £999 £1,614 £1,058 £1,013

Source: Just Group

Overall, it is estimated up to a million eligible households in the UK are failing to claim for Guarantee Pension Credit and Savings Pension Credit, missing out on £1.8 billion - or around £1,700 each. Just Group also found that couples are less likely to take up their entitlement than single people, and pensioners over the age of 75 are less likely to claim than younger retirees. Despite eligibility criteria becoming narrower in recent years, Just Group maintains that it is crucial that pensioners - and soon to be pensioners - find out which benefits they may be entitled to in order to live as comfortably as possible.

3 key benefits you could claim

There are 3 key benefits which Just Group identified that retirees may be eligible for to give their income a boost. Below is a summary of each one, including how much you could receive and how to apply. Remember that if you are not eligible for any of the following yourself, you may still be able to direct family members or friends towards any benefits that they could receive.

Guarantee Pension Credit

Guarantee Pension Credit is a means-tested benefit for pensioners on a low income designed to top up their weekly State Pension to a minimum amount. This is the main benefit aimed at helping low income retirees to cover living costs, such as paying for an at-home carer. It is provided in payments directly from the UK government and tops up your weekly income to £177.10 if you are single or £270.30 if you have a partner. You may be eligible for more if you have a severe disability, are a carer for another adult or you have additional housing costs. In order to apply for Guarantee Pension Credit, you can complete an online form if you have already applied for your State Pension. 

Savings Pension Credit

Savings Pension Credit is a benefit designed to give pensioners who have already saved towards their retirement some extra income to reward them for their efforts. Savings Pension Credit is only available for people who reached state retirement age before April 2016. However, if you are part of a couple and your partner reached state pension age before 6 April 2016, you could still qualify. There are certain requirements you must meet in order to qualify, however, such as having a minimum income of £153.70 a week if you are single or £244.12 a week if you are in a couple. The maximum amount you can get per week is £14.04 for a single person and £15.71 for couples. You must have also accrued some savings for your retirement, such as through a private pension. In order to apply for Savings Pension Credit, you can complete an online form if you have already applied for your State Pension.

Council Tax Reduction

You could be eligible for Council Tax Reduction if you are on a low income or are already claiming other benefits. If you receive Guarantee Pension Credit, you may even get your Council Tax reduced by 100%. Local authorities run their own council tax support schemes, so you will have to contact them directly to find out if you are eligible. To apply for a Council Tax Reduction, you can find your local council and browse their dedicated website for details on eligibility and how to apply.

Find out which benefits you are entitled to

If you or someone you know is retired and struggling to make ends meet and you are unsure which benefits they are entitled to, you can use a calculator to do the hard work for you. Just use the free entitledto benefits calculator and fill out the online form to receive a list of benefits you may be able to claim based on your unique circumstances. You can also check out our 7 quick tips on how to boost your pension and use Damien’s free Money MOT to direct you towards areas you may be able to improve before you apply for any benefits.