Huge jump in pension credit claims as older people try to hang on to Winter Fuel Payments

Pension credit applications have soared 81 per cent since it became a necessary hurdle for keeping the Winter Fuel Payment - but nearly half of claims were rejected.

Chancellor Rachel Reeves announced plans last July to start means-testing the annual fuel payment, worth from £100 to £300, which is intended to help with energy bills.

Since then the Government has received 235,000 pension credit claims, up from around 130,000 in the same period the year before.

But 114,500 applications were rejected, which was a 133 per cent jump in claims not awarded compared with the year before, the latest official figures show.

Some 117,800 pension credit claims in the relevant period were awarded to date, representing a 64 per cent increase.

The Government's decision last summer that Winter Fuel Payments would be means-tested in future sparked an outcry from charities and campaigners for the elderly.

In addition to publicly protesting the move, including a 650,000-strong petition organised by Age UK and delivered to 10 Downing Street last week, they ran awareness initiatives to get people to claim pension credit and keep their payments.

> Claiming pension credit: Find out how to top up your weekly income

Pension credit boosts weekly income to a minimum of £218.15 for single people and £332.95 for couples, and gains you access to a lot of additional help with bills.

Disabled people and carers can have a higher income and still qualify for pension credit. Our retirement columnist Steve Webb explains the rules of the 'severe disability premium' and the 'carers premium' here.

The full new state pension will rise from £221.20 to £230.25 a week in April, boosting it to nearly £12,000 a year,

The charity Independent Age ran a celebrity campaign led by Succession star Brian Cox urging hard-up pensioners to claim pension credit.

Its boss Joanna Elson says of the claim figures released today: 'This is good news for people who are now receiving this entitlement, as they will be eligible for pension credit payments, next year’s Winter Fuel Payment, and the other forms of financial support that pension credit opens doors to.'

But she adds: 'There is a story behind each application, and many people living on a low income would have applied in hope but found out they are just a few pounds above the pension credit threshold, meaning they also lost a vital lifeline in the Winter Fuel Payment.'

'The influx of both successful and unsuccessful applications clearly illustrates that many older people were concerned about not having enough money to get through the winter.'

Elson says her charity received thousands of calls to its free phoneline (0800 319 6789) from older people making drastic cutbacks to get by, from going to bed in winter clothing to only having one meal a day.

'This is unacceptable. Linking pension credit to the Winter Fuel Payment so hastily was misguided. Almost one million eligible people do not receive Pension Credit, meaning they lost the Winter Fuel Payment despite living on a low income.'

She says many people hover just above the income threshold to receive pension credit, and she is calling for Government to review and widen the eligibility criteria for the Winter Fuel Payment.

Stephen Lowe, a director at Just Group, says: 'The scrutiny on the take up of pension credit has been more intense since the Government limited winter fuel payments to people who are in receipt of the benefit.

'This is valuable income which will support those retirees most in need every year. However, there is still a huge number of pensioners who are failing to claim – it may be they are simply unaware of the benefit, assume they are not eligible or do not know how to claim.

'Our own research among over-65s found that nearly four in 10 (38 per cent) pensioner homeowners and one in seven (15 per cent) of renters had never checked their benefit entitlement.'

Rachel Vahey, head of public policy at AJ Bell, says: 'The Department for Work and Pensions today is celebrating a surge in the number of pension credit claims, and with good reason given uptake has been poor in the past.

'But the fact it comes off the back of Rachel Reeves’ decision to means-test the Winter Fuel Payment may leave a bad taste with some.

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'While the jump in Pension Credit claims received and awarded is significant and the government should be lauded for its efforts to boost applications, the flipside is that there was also a jump in the proportion of claims being denied.

'As many pensioners rushed to claim in fear of losing their Winter Fuel Payment, some will not have met the criteria and subsequently been told they cannot receive payments.

Vahey adds: 'Pension Credit has historically been chronically underclaimed, with over a third of households who could be eligible failing to make a claim each year.

'This could be for a number of reasons, from a lack of awareness to difficulties filling out forms or a reluctance to be seen as a benefit claimant.

'The decision to means-test the Winter Fuel Payment means it’s even more important for those who could qualify for pension credit to make a claim.'