Pension Credit take up efforts are working

New figures from DWP show that Pension Credit awareness and take up campaigns by central and local government are proving more effective than anticipated. Policy in Practice analysis shows that this will eat into the government’s expected £1.4 billion savings from the Winter Fuel Payment cut, ensuring that thousands of the poorest pensioners get the support they need.

Official figures show there have been 44,900 additional claims since the announcement of changes to the Winter Fuel Payments, a 152% increase compared with the trend before the announcement.

New analysis by Policy in Practice forecasts the increase in Pension Credit take up to the end of the year. We find that there will be 242,400 new claims for Pension Credit from the date of the announcement (Monday 29 July 2024) to the last day eligible pensioners can claim Winter Fuel Payments (Saturday 21 December 2024).

We estimate that this means 158,000 additional claims for Pension Credit will have been made, compared with the trend before the Winter Fuel Payment announcement.

The Winter Fuel Payment equality impact assessment from DWP shows that the £1.4 billion savings from the cut to Winter Fuel Payments assumed an increase in Pension Credit claims of around 100,000. We expect the government will reach its anticipated increase in claims by early to mid November.

Policy in Practice has seen a steep rise in interest in Pension Credit take up campaigns. Around one in five local authorities have either run or are looking to run take up campaigns before Christmas, in addition to government and media led awareness campaigns and take up efforts.

The equality impact assessment assumed that additional Pension Credit claims would cost an average of £3,900 a year. We estimate that the increased take up was likely to cost the government £246 million more than anticipated, reducing the savings from the Winter Fuel Payment cut from £1.4 billion to £1.15 billion.

We found that this could push the average cost per claim up from £3,900 to £6,799. If we use this figure as the cost per claim, the increase in cost above the amount anticipated could be as high as £700 million, halving the savings from the Winter Fuel Payment cut.

While this could create a headache for the Treasury, we don’t think that the additional Pension Credit claims are a false economy. It’s great news that more of the poorest pensioners are getting the financial support they need. We expect we will all benefit from lower social care costs, knock on savings to the health system and a societal boost to pensioner’s ability to stay healthy, active and warm for longer.

Deven Ghelani, director of Policy in Practice, stated:

It’s great news that more pensioners are getting the financial support they need. The increased income for some of the country’s poorest elderly citizens can have wider benefits, providing much needed relief during a cost of living crisis.

Policy in Practice has seen unprecedented demand, helping one in five local authorities to run Pension Credit take up campaigns in the lead up to Christmas. Policy in Practice’s targeted take up campaigns use Housing Benefit and council tax support data to drive an increase in take up.

While this means the change is unlikely to save the Treasury as much money as it hoped, it has meant a life changing boost in income for hundreds of thousands of pensioners living in poverty.