What national Pension Credit campaigns can learn from local experience

Until recently, £2.1 billion in Pension Credit went unclaimed. This figure now lies at around £1.5 billion largely thanks to the efforts of locally led Pension Credit campaigns. With the removal of the Winter Fuel Payment, the Department for Work and Pensions has joined local authorities in delivering take up campaigns and together we are making a difference.

Figures released this week show Pension Credit take up rates have risen from 63% to 65%, an increase of 110,000 claims. With an average Pension Credit award of £3,900, this is around £429 million a year for low income older people who otherwise would have remained in the dark about their eligibility.

Also this week, Policy in Practice founder, Deven Ghelani spoke to Paul Lewis on BBC Radio 4’s Money Box saying,

Pension Credit is an essential element of support, helping people to take a more active role in society. It can be complicated to apply, and stigma is a major barrier. One effect of the withdrawal of the Winter Fuel Payment is that people are starting to see Pension Credit differently and hopefully reversing some of the shame people can feel approaching the government for support.

Listen back to Deven Ghelani, Policy in Practice, on BBC Radio 4’s Money Box

This blog outlines the progress on Pension Credit take up over the last year, and explores the implications for local authority led take up campaigns, outlining how central and local government can work together to close the unclaimed support gap.

Having delivered successful take up campaigns for more than five years, we know the impact of proactive outreach, and have long advocated for targeted take up approaches to maximise incomes for people living in poverty.

We work with one in five local authorities to identify people who are missing out, using benefit administrative data to inform them of their eligibility, removing the doubt and fear behind understanding complex benefit criteria. To date this work has delivered around a quarter of a billion pounds in increased benefits.

Our recent work with the Greater London Authority and Mayor of London highlights the success of scaling up borough wide campaigns to regional campaigns with these pan London efforts securing over £17 million a year in Pension Credit for older people.

As Pension Credit is generally paid for the lifetime of the claimant, the ongoing economic impact of this work has put more than £200 million into the pockets of older Londoners who need it the most.

The financial impact does not end there. Pension Credit opens doors to other benefits such as Housing Benefit, Council Tax Reduction, Warm Homes Discounts, free TV Licences, and from this winter, the Winter Fuel Payment.

By not claiming Pension Credit, low income pensioners are missing out on around £6 billion a year in state support.

As the increased drive to claim Pension Credit continues, the planned savings from means testing the Winter Fuel Payment are falling.

Since July, when the Winter Fuel Payment changes were announced, there has been a more than 150% increase in Pension Credit claims made to the DWP. Nearly 120,000 more Pension Credit claims are expected by Christmas.

The government budgeted for a modest increase in Pension Credit claims of 95,000, and having already bypassed this figure, we are already beginning to offset savings made by Winter Fuel Payment changes by around £92 million.

Once we factor in the additional benefits new Pension Credit claimants can now access, expenditure on Pension Credit could be £435 million over budget.

Pension Credit campaigns could see the cost of Pension Credit to be £435 million over budget

This is great news for older people living on the lowest incomes. And, while at first glance this might not appear to be great news for the public purse, investing in our poorest pensioners will have longer term impacts on services and budgets in the years to come.

Health and wealth go hand in hand. Providing the means to eat better, heat homes and lead more active, fulfilling lives can stave off the need for health and social care services for our older neighbours.

Providing additional income in the form of Pension Credit and other associated benefits means older people can live in their own homes for longer, and with adult social care budgets pushing local authorities into dire financial states, any and all efforts to curb these costs are welcomed.

Targeted take up campaigns work. Our work with local authorities has demonstrated this time and again, and now the DWP is taking a similar approach meaning that together we are making a bigger difference.

Early take up work from the DWP in 2010/2011 saw claim rates at around 11% which means that slightly over one in ten people contacted went on to claim Pension Credit.

Since this trial, improvements in data sharing and availability of analytics platforms like LIFT, more targeted approaches have become available and greater take up rates have followed.

Since the announcement to tie the Winter Fuel Payment to Pension Credit claims, the spotlight has once again turned to Pension Credit. This week DWP has released insight into their more recent campaign work, the Invitation to Claim trial.

The Invitation to Claim trial covered ten local authority areas in 2023. It used data from Housing Benefit administration to target key messages to residents known to be missing out on Pension Credit.

The DWP’s 2023 campaign was at first hampered by lower than expected take up, the result of a data mismatch that led to around two thirds of the people contacted not being eligible for Pension Credit.

In addition, criteria such as state pension income and partner income were initially not taken into account as well as some occupational pensions; evidence of the complexity of both Pension Credit policy and the data engineering that goes into targeted take up campaigns at scale.

Overcoming this and refining their targeting criteria led to a more effective campaign. Of the 708 people contacted in the refined campaign, 195 people went on to receive Pension Credit, a take up rate of 27.5%.

Learning from both the DWP’s campaigns and our own locally-led campaigns means take up efforts in the form of Pension Credit campaigns are becoming more effective.

While this improvement is encouraging, there is still a long way to go, particularly in reaching more pensioners eligible for Savings Credit, where take up remains noticeably lower at 42% in 2023, compared to 72% for Guaranteed Credit claims in the same period.

The DWP should be running targeted take up campaigns as part of its wider efforts to ensure our social security safety net is strong enough for people in need. However, these campaigns can be made more effective by delivering them in partnership with local authorities.

Administrative complexity and the shame and stigma of claiming benefits are still major barriers that leave £23 billion of support unclaimed each year. Local authorities can and have been leading the way on this with initiatives to close the unclaimed support gap.

Our work with the Greater London Authority (GLA) has contacted pensioners across 25 London boroughs, sending targeted letters informing residents of their eligibility for Pension Credit.

Delivered over two phases, with a third phase due in early 2025, the first wave of take up work saw more than 2,300 successful Pension Credit claims made. With 8,200 households identified, this reflects a take up rate of 28%, rising to 34% for local authorities taking part in multiple campaign phases.

Each pensioner helped through this work gained an average of £4,394 each, and they will all now receive the Winter Fuel Payment which is worth an additional £200 to £300 per household.

Low income Londoners now have £17.9 million a year more income thanks to locally led campaigns from London’s leading local authorities.

One benefit of a local campaign comes through greater local collaboration. Locally led take up works as councils are uniquely positioned to lead proactive outreach in partnership with third sector partners. This is because:

1. Local authorities are more trusted than some national agencies and have more of an everyday involvement in residents’ lives, meaning residents are more likely to open their letters
2. Local campaigns can be tailored to local communities such as translating key messages into local languages and connecting residents to support by partnering with services such as Age UK or Citizens Advice
3. Councils can reach more pensioners missing out on support by using other local data sources such as Council Tax Reduction data
4. Some councils can put resources into follow up phone calls and have built financial inclusion teams into their front line services
5. Coupled with local awareness raising campaigns and the influence of friends and family, repeated local messages and notifications can all contribute towards reduced stigma and increased claims

Deven Ghelani joined Peter Tutton of StepChange debt charity on BBC Radio 4’s Money Box to talk about Pension Credit campaigns

Whichever campaign method is adopted, shame and stigma remain the biggest barriers to overcome, and once again local authorities are leading the way in overturning these beliefs.

Policy in Practice’s GLA campaigns have sought to address stigma by targeting messages designed to normalise claiming Pension Credit. In partnership with the Institute for Fiscal Studies, we have been testing simple but effective key messages such as “most people like you are already claiming their Pension Credit.”

Other barriers such as privacy concerns have also been addressed, again through direct messaging, reinforcing that Pension Credit claims are private.

The approach we have developed with our local authority partners is straightforward, easily replicable across councils. It can significantly narrow the gap in unclaimed support. We work with one in five local authorities across the UK, helping to automate the take up of benefits including Pension Credit, Attendance Allowance, Free School Meals, Healthy Start, energy support packages and more.

Income maximisation is one of the best tools we have in the fight against pensioner poverty, and while the Winter Fuel Payment losses might be the trigger for increased claims, we cannot lose sight of the greater gains provided by Pension Credit.

Whether it is through consistent and repeated campaigns by local authorities or national efforts or a combination of both, it is clear we are making a difference. And that take up work needs to continue beyond the Winter Fuel Payment deadline and expand into other benefits urgently.

The results from the DWP and our own locally led campaigns prove that targeted, data driven outreach does work.

We’ve seen firsthand how proactive, locally led efforts can dramatically boost take up, not only improving pensioners’ financial wellbeing but also helping families with children, and others who are struggling financially, while enriching their lives by connecting them with local services and their wider community.

In whichever form it takes, whether locally led or nationally driven, we welcome increases to Pension Credit. We welcome the DWP’s take up work, and we will continue to push for greater data sharing to make this process easier for local councils and more beneficial for their residents.

We also welcome the increased focus on Pension Credit this winter, as whatever gets us there, the shared goal is to alleviate poverty in its many forms. We’re seeing the dial shift in the right direction.

The Winter Fuel Payment deadline for Pension Credit claims is 21 December 2024. Our local authority partners are at the vanguard of take up work and it’s not too late to implement your own local campaign. Nor is it too late to build your Household Support Fund around those pensioners who are just missing out on Pension Credit.

This approach is easily scalable and cost effective for councils and we strongly encourage any local authorities interested in running a take up campaign to contact us at hello@policyinpractice.co.uk.

• Find out how much Pension Credit is unclaimed in your area and how many pensioners have income just above the Pension Credit threshold here
• Learn how LIFT is helping one in five local authorities to run Pension Credit take up campaigns. Details here
• Join our free webinars to hear our policy experts and guest speakers explore policy challenges and solutions. Details here