William Eichler 14 September 2020

Failure to deliver pension credit costing care system £4bn a year

The failure to deliver pension credit to over a million older people who are entitled to it is costing the health and social care system £4bn a year, report reveals.

Pension credit, a benefit designed to keep the least well-off pensioners out of poverty, is currently being received by just six in 10 (61%) of those who should be receiving it.

New research from the Centre for Research in Social Policy at Loughborough University, commissioned and published by Independent Age, has found that the low take-up is creating significant knock-on effects for the NHS and social care, costing taxpayers an estimated £4bn per year.

As Independent Age points out, the bill to the taxpayer is significantly higher than the annual cost of giving pensioners the £2.2bn to which they are entitled but are not receiving.

The report concluded that if pension credit take-up was lifted from 61% to 100%, then almost 450,000 pensioners could be lifted out of poverty.

Commenting on the report, chief executive of Independent Age, Deborah Alsina, said: ‘The Government needs to urgently create an action plan that contains high quality, up-to-date research into who is not claiming pension credit and why they are not receiving it. There needs to be recognition of the active role the Government must to play to increase Pension Credit take-up.’

Responding to the report, Cllr Ian Hudspeth, chairman of the Local Government Association’s (LGA) Community Wellbeing Board, said: ‘Improved take-up of pension credit should be an ambition with the primary motivation being to reduce health inequalities, ensure people are kept out of poverty and able to live the lives they want to lead.

‘Any resultant savings in providing health and social care services would be good news and supports the case for increased investment in prevention.

‘This helpful report should be considered by government as it develops its proposals for the future of adult social care in England, which needs to include not just older people but working-age adults and all those who use and work in social care.’

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