Thousands of pensioners missing out on DWP income boost due to ‘long and difficult' process
Thousands of pensioners are missing out on 'billions' of pounds in DWP support due to difficulties with the benefits system, a new report has found.
Older people find applying for crucial benefits 'long and difficult', according to the research from Independent Age, with excess complexity locking them out of some major entitlements.
Researchers found that for just four of the key older-age benefits, applicants would need to answer 450 questions, many covering similar areas.
These include Attendance Allowance, Council Tax reduction, and Pension Credit which could add up to nearly £500 before the latter's 'passported' benefits. This includes things like mortgage support, a free TV licence and, since last July, the Winter Fuel Payment, all adding up to as much as £4,300.
Even more valuable is Housing Benefit, which for many pensioners is uncapped and could provide up to 100 per cent of their rent. The take up of this benefit for pensioners is relatively high, at 83 per cent, but this still represents 270,000 households missing out on £1.1 billion a year – an average of £3,700 a household.
The take up of Pension Credit increased slightly following Labour's decision to link the benefit to the Winter Fuel Payment for the first time from 2024. Following a campaign to boost by the DWP last year, over 120,000 more pensioners have begun receiving it since July.
The department also says it is consulting on ways to get the benefit to those who need it, with plans to jointly administer Housing Benefit and Pension Credit set to come into force 'as soon as possible'. But more must be done to ensure pensioners are able to access all the benefits they are entitled to, Independent Age argues.
The charity's chief executive Joanna Elson CBE said: 'It is clear that the UK has a social security system that is far too complex and difficult to navigate, and while there are numerous entitlements available, many people in later life are often unable to access potentially life-changing support as a result. Something has to change.
'There are currently around two million older people living in poverty, and a further one million are precariously on the edge. The UK Government and local authorities must work together to drive take-up for benefits such as Pension Credit and Housing Benefit.'
Reflecting on her experience with the system, Susan, 69, told Independent Age: 'Applying for Attendance Allowance was awful. Reducing me to tears and even making me feel suicidal several times. Not only were the questions difficult to understand, dwelling on all of the things that I am no longer capable of doing sent me into a very dark place.'
'Applying for help in way of benefits is extremely difficult in the end, one just gives up and continues to struggle,' added Alan, age 80.
A DWP spokesperson said: 'We have made the process of applying for benefits as accessible as possible – such as completing the Pension Credit claim form online now takes on average just 16 minutes while figures published last week show nearly 120,000 more pensioners are receiving it since July.
'Our new initiative of joining up State Pension and Pension Credit is supporting more people onto the benefit as soon as they become eligible, and we have written to over 120,000 pensioner households in receipt of Housing Benefit about Pension Credit to better join up the offer and further improve uptake.'
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Telegraph
32 minutes ago
- Telegraph
Five loopholes wealthy pensioners can use to claim winter fuel payments
Pensioners are being advised on how to tweak their annual income to ensure they receive the winter fuel payment. Those earning above £35,000 a year are frozen out of keeping the government-funded cash boost under new rules unveiled by Rachel Reeves. Financial planners told The Telegraph that those just above the £35,000 limit could make small behavioural changes which will give them a cash boost this winter. Alice Haine, of wealth manager Bestinvest, said the new threshold 'is effectively another tax cliff-edge'. 'Paying attention to what constitutes as income may become very important for those whose incomes hover around the £35,000 mark, as a minor adjustment could be the difference between receiving the payment or handing it back through tax.' Income from the state pension, private pensions, savings interest and dividend payments all constitute the annual pot which determines winter fuel eligibility. How the new rules work Following a barrage of criticism for swiftly axing the winter fuel payment for millions last year, Chancellor Rachel Reeves about-turned on the policy this week. She said the decision to reinstate winter fuel payments for the majority of elderly people meant 'no pensioner on a lower income will miss out'. Under the new rules, those earning over £35,000 will receive the money, but it will be effectively clawed back via HMRC based on an individual's taxable income. If both occupants of a household have an income over £35,000, they will be required to return their full winter fuel payment via a tax return or PAYE. If one occupant has an income over £35,000 and the other less, half the money must be returned. In households where both pensioners earn less than the threshold, they will keep the full payment. Around 75pc of pensioners in England and Wales, approximately nine million people, will be entitled to the payment. Five ways to become eligible Sarah Coles, of Hargreaves Lansdown, said 'there are some sensible no regrets moves you can make'. Here are the five steps pensioners could consider. Reduce pension drawdown income Those who take their income from a pension drawdown could reduce their taxable earnings. For example, they could take a smaller income and top up their spending needs from tax-free cash instead. 'This could keep them just under the line, but they need to be sure this still aligns with their overall retirement plan,' said Jon Greer, of tax firm Quilter. By making use of this tactic, you wouldn't lose any income, as the money not taken as a monthly payment will remain in your pension pot for drawdown further down the line. Ms Haine said it would make most financial sense for pensioners to reduce their regular drawdown in February and March in the run-up to the end of the tax year. She added: 'This ties in with the break households receive on their council tax bill, which is typically charged across 10 months with a two-month pause in February and March.' 'Stopping drawdown in those months might ensure the loss of income coincides with the point when there are no council tax charges to pay.' Transfer assets to a lower-earning spouse In situations where one partner earns above the £35,000 threshold and their partner doesn't, couples could shift assets to the lower earner to ensure they can receive the full winter fuel allowance. While a pension cannot be transferred to someone else's name, other income-generating assets such as investment portfolios can. As an example, Tom and Sally are both retired and married. Tom receives £36,000 per year from a mix of the state pension, private pensions and dividends. Sally's income is around £20,000. If Tom transfers part of his portfolio that delivers £2,000 in annual dividends to Sally, this lowers his annual income to £34,000, while boosting hers by £2,000. Tom now falls below the threshold, and from a household wealth point of view, they are no different. Sally would also benefit from using her tax-free dividend allowance (up to £500) too, meaning they get the winter fuel payment and potentially less tax on the dividend income. Move savings into an Isa The tax havens, which can prove beneficial in a host of scenarios, can once again prove a shrewd tactic for those just missing out on the winter fuel payment. Ms Haine said: 'With savings interest, even if it falls within your personal savings allowance, it's considered taxable income, so the chunk you don't pay tax on will count towards the £35,000.' For instance, if a pensioner earns £2,000 a year in savings interest, that sum will count towards their annual income in the eyes of winter fuel eligibility. 'But if you move that money into a cash Isa, all the interest is tax-free, which takes it out of the calculation,' Ms Haine said. The same goes for taxable income from investments. Moving these into a stocks and shares Isa would reduce your taxable income and could also bring you under the threshold. Draw money from your Isa rather than pension For those already with hefty Isa savings, you could dip into the savings to reduce your reliance on your pension income. In doing so, you'd need to sacrifice growth in your Isa, so it might not be worth taking such action for the sake of earning the winter fuel payment. Ms Coles said: 'It's not going to work for everyone, but if you have Isa savings and investments alongside your pension, you can consider where you draw your income from. 'If you were planning to draw money from a pension that would take all your taxable income slightly over £35,000, for example, you could take some of it from an Isa and stay under the threshold – it would protect you from tax as well.' Donate to charity Alternatively, you could donate to charity to reduce your overall income, and slip below the £35,000 line. Ms Haine said: 'Charitable donation can be another way to reduce an individual's taxable income, as the charity takes the donation and then reclaims the tax paid by the giver from HMRC. 'For couples, making sure the charitable donations are made by the spouse or civil partner with the higher marginal tax rate has the potential to reduce taxable income below the £35,000 threshold. What to do next Wealth managers expect to see increased queries from middle-earning pensioners in the coming months over whether they could make minor changes to become eligible for the winter fuel allowance. When determining what to do next, make sure to weigh up the overall implications of any changes. Mr Greer said: 'We could see some very small behavioural changes among those with flexible income streams, particularly couples with a bit of financial wriggle room. 'But the fact remains that £200 or £300 isn't a big enough carrot for most to make major changes, especially when the rules risk becoming even more complex.'
Daily Mail
34 minutes ago
- Daily Mail
We should all hope Rachel Reeves delivers growth - or our taxes are going up: SIMON LAMBERT
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Add in the backdrop of a screeching U-turn on winter fuel payments, a rise in job losses blamed on the Autumn Budget 's employer national insurance rise, and a Spring Statement that regained a wafer-thin £9.9billion fiscal rule buffer only for this to be wiped out soon after by Donald Trump's tariff ructions, and you don't envy Reeves at all. As the old asking for directions joke punchline goes: 'Well, I wouldn't start from here'. There was more money for defence, schools and the NHS and less money for other public services deemed less important, or able to be brushed under the carpet for now. Ultimately though, the economic story remains the same as it was with Reeves' Tory predecessors: meet your targets by outlining plans that involve growth picking up, productivity improving and cutting spending in the future. Since Rishi Sunak there's also been some fiscal drag from frozen tax thresholds chucked in for good measure. Based on the OBR's five-year outlooks, this allows Chancellors to meet their fiscal rules. The fact that these forecasts inevitably turn out to be wrong, productivity doesn't improve, and things don't end up balancing is conveniently ignored. Yet, still we continue with the farce of policy by spreadsheet. As I've written before this fairytale economics is a terrible way to make decisions. Fortunately, the Chancellor had one card up her sleeve, the change to borrowing rules that allowed extra infrastructure investment. It freed her up to announce £113billion of plans to knock Britain into shape. These ranged from £39billion for affordable homes over a decade, to £30billion on nuclear power, £15billion on transport schemes. Among the beneficiaries will be rail and bus links in the North, the Oxford to Cambridge Arc, and the Sizewell C nuclear plant. Will these things deliver growth? Over time, they should do, but we will have to wait for that to arrive. 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The Herald Scotland
37 minutes ago
- The Herald Scotland
Winter fuel payment u-turn exposes flaws in SNP's universalism
Reeves maintained that circumstances have changed so much that the u-turn now represents a model of safe fiscal navigation. She was bound to claim that and I don't really care, so long as it allows a costly political mistake to be neutralised. In fact, Reeves' statement indicated quite a few 'u-turns' which have headed the government in more recognisable Labour directions. Thank goodness for that too, I say. People voted for change and it needs to be more visible. In the run-up to last week's by-election, lots of voters were still angry about Reeves' initial action on Winter Fuel Payments but not enough, as it proved, to change the outcome. Labour has had the sense to listen and respond with more positive messages. The Chancellor was not just redistributionist in her commitments to health, education, housing and so on, which apply directly to England. She also spread serious investment around the nations and regions, on top of the record £52 billion to the Scottish Government. Read more from Brian Wilson: Her England-only funding will lead to lots of 'Barnett consequentials' for Scotland. Normally, these are taken with one ungrateful hand and recycled with the other as Scottish Government largesse, without a backward reference to where the money came from. Anas Sarwar will need to keep reminding them and this time more attention must be paid to whether the extra billions are used for priorities which generated them. For example, every penny of 'consequentials' which flow from extra NHS spending in England should be spent on the NHS in Scotland, which has not always happened in the past. There should be complete transparency around this and how other Barnett money, on top of the £52 billion, is spent, and the value we get. However convoluted the route to get here, Winter Fuel Payments now offer a perfect example of why 'universalism' is one pillar of nationalist rule which is long overdue for a 'u-turn', preferably under a new Holyrood administration which has the courage to take the argument on. Under Reeves' plans, pensioners with income under £35,000 a year will get the Winter Fuel Payment of two or three hundred pounds. Those above that amount will not. The vast majority of people will regard that compromise as somewhere between fair and generous. I haven't heard anyone plead the case for restoring universalism. Except, of course, in Scotland where the nationalists committed themselves to paying every pensioner £100, whether they need it or not. It was a political gimmick to demonstrate generosity, humanity etc in comparison to Whitehall, to be funded entirely from the Scottish budget (at the expense of something else). Now the money will come from the Treasury and it will be up to Edinburgh to divvy it up. If they persist in giving £100 to pensioners above the £35,000 threshold, it will either be at the expense of the less well-off or an entirely pointless use of scarce resources, other than to justify 'universalism'. Maybe that example could open the door to an overdue wider debate in Scotland around 'universalism' which opposition politicians tend to steer clear of because the assumption has developed that 'free things are popular' even if their effect is to widen wealth and attainment gaps, rather than narrow them. In a world of unlimited resources, universalism may be a desirable concept, to be recouped through correspondingly high taxation. In the world we inhabit, on the other hand, it is a lofty-sounding device for transferring scarce resources from those who have least to others who are much better off. That is a deception which the SNP have deployed to great advantage. Anyone who challenges it is accused of wanting to reintroduce 'means-testing' which carries the stigma of 1930s oppressors keeping money from the poor. In the 2020s, however, the case for 'means-testing' is to stop giving money to those who don't need it. Another obvious example of this con-trick involves 'free tuition' which now plays a large part in bringing Scotland's universities to the point of penury, forcing large-scale redundancies, excluding Scottish students from hundreds of desirable courses and making our great seats of learning more dependent on decisions taken in Beijing and Seoul than Edinburgh. 'Universalism is one pillar of nationalist rule which is long overdue for a 'u-turn', preferably under a new Holyrood administration' (Image: Radmat) At some point, politicians must have the courage to call out this deception for what it is. The guiding principle that nobody should be prohibited by economic circumstances from going to university does not equate to 'universalism'. Quite the opposite is true. Universalism actually works against those who need far more support if the dial on educational attainment is ever going to move, which it hasn't done in Scotland under present policies and posturing. If public money is to be better spent in Scotland to attack poverty and disadvantage while creating a thriving economy, then shibboleths will have to be challenged. The Scottish Government has never been short of money and certainly won't be now. The question of how it is spent and wasted should be the battlefield of political debate. Another satisfactory 'u-turn' confirmed yesterday was recognition that nuclear power will be an essential component in the transition to a clean energy future. I wish the same obvious conclusion had been reached 20 years ago, when I was arguing for it within government, or could be recognised even now by the student politicians in Edinburgh. With renewables and nuclear, Scotland really could have been a world leader on net zero. Without nuclear, it will still need fossil fuels for baseload for the foreseeable future with imports, rather oddly, regarded by some as morally superior to those extracted from the North Sea. Bring on another u-turn! Brian Wilson is a former Labour Party politician. He was MP for Cunninghame North from 1987 until 2005 and served as a Minister of State from 1997 to 2003.
