Thousands urged to take up benefit 700,000 do not claim as MPs call for new rules

Huge numbers of Brits are missing out on a benefit worth an average of £4,300 a year. MPs have raised concerns over the large number of people not being paid what they are entitled to.

The call comes as the Work and Pensions Committee has urged the creation of a national strategy to combat pensioner poverty. The cross-party group of MPs also suggested that the UK Government should establish - and guarantee - a minimum level of retirement income.

Once this level is set, they propose a plan should be devised for everyone to achieve it. Given that the State Pension forms the crux of the Labour government's offer to pensioners, the committee believes it should provide enough for a "minimum, dignified, socially acceptable standard of living".

They have called for a commitment to a nationwide, cross-government strategy for an ageing society, which they believe would help target support to alleviate pensioner poverty.

Their report on pensioner poverty warns that without effectively addressing poverty as a root cause of ill-health, "the government will not be able to achieve its goal of building a health and social care service that is sustainable".

The report also draws attention to long-term trends that "threaten to undermine pension adequacy", such as the increasing trend of people renting in their later years, reports the Daily Record.

By the end of 2025, the committee has also requested a Pension Credit take-up strategy for England.

Despite being worth an average of £4,300 annually, the uptake of Pension Credit has remained between 61 per cent and 66 per cent for the past decade, with an estimated 700,000 households eligible but not claiming, according to the Committee.

The report suggested that a taper to Pension Credit should also be examined to "mitigate the cliff-edge effect" for those who presently fall short of qualifying.

Current regulations mean some State Pensioners marginally exceeding income limits might find themselves in a worse position than those earning slightly less, the study noted.

A successful Pension Credit application - even for as little as £1 weekly - can provide access to additional support including assistance with accommodation costs, energy bills, Council Tax and complimentary TV licences for over-75s.

How to verify Pension Credit eligibility

Elderly individuals, or relatives and acquaintances, can swiftly assess their qualification and obtain an estimate of potential payments using the online Pension Credit calculator available on GOV.UK here.

As an alternative, pensioners may contact the Pension Credit helpline directly to submit a claim on 0800 99 1234 - telephone lines operate from 8am to 6pm, Monday through Friday.

The committee contended that depending on supplements like Pension Credit and Housing Benefit proves inadequate to prevent individuals from dropping beneath the poverty threshold.

The report stated: "After a decline in pensioner poverty in the 2000s, the number of pensioners in relative low income started to rise again from 2010. This has been exacerbated by increases in the cost of living since 2021."

It went on: "The number of people of pension age living in relative poverty (below 60% of median income) is 1.9 million or 16 per cent of pensioners.

"Measures which factor in the cost of living show that between 2008/09 and 2022/23, the number of pensioners in households below the Minimum Income Standard (MIS) - the amount needed for a minimum dignified socially acceptable standard of living - rose from 1.5 to 2.8m.

"The proportion of pensioners below 75 per cent of MIS (where the risk of material deprivation increases substantially) rose from 5.9 per cent in 2021/22 to 9.5 per cent in 2022/23.

"In reality, this means reducing spending on necessities, such as food, heating and social activities, in a bid to control expenses. Medical professionals outlined the health consequences. Economic struggle can speed up the ageing process, increasing the likelihood that an elderly person will require hospital treatment or care."

The committee noted that in certain areas, organisations are collaborating towards common goals.

The report added: "However, not all areas do this. We heard that it would help to have a national cross-government strategy for our ageing society and older people.

"This could provide a framework to hold the different partners to account for their role in delivering the agreed outcomes. It could also ensure that central government departments developed policy with shared objectives in mind."

Committee chairwoman Debbie Abrahams said: "To boost incomes, the Government needs to come up with a strategy to increase Pension Credit take-up. It's a scandal that so many have missed out for so many years, often through an aversion to claiming benefits altogether, or lack of support.

"The fairness of the Pension Credit eligibility criteria where if you are a penny above the threshold, you miss out on thousands of pounds, also needs to be looked at.

"Ultimately, the Government should decide what it thinks is enough for a dignified retirement, and then work to ensure that all pensioners are on at least that level.

"Faced with a combination of high energy costs, ill-health and ever higher rates of pensioners in more costly privately rented accommodation, tackling pensioner poverty is not simply a DWP (Department for Work and Pensions) issue. So, we're calling for a nationwide, cross-government strategy for an ageing society that should be rooted in equity and well-being."

Independent Age Chief Executive Joanna Elson CBE, remarked: "The Work and Pension's Committee has highlighted the urgent truth; the UK needs a strategic approach to tackle pensioner poverty. With millions of older people living in financial hardship, now is the time for action.

"The older people Independent Age speaks to are living on desperately small incomes, forcing them to make drastic cutbacks. They are going to bed in hats and coats, eating one small meal a day and washing less to save on water. This is not right.

"We warmly welcome the Committee's recommendations and are pleased to have contributed to this important inquiry, alongside the many people in later life who shared their views directly with the Committee. The voices of older people have been heard throughout this inquiry and the tangible and impactful recommendations speak to the changes older people in poverty need to see now and in the future."

She continued: "Our own research highlights the importance of people having an adequate income in later life, particularly those reliant on just the State Pension and social security system. Also essential is that everyone receives the financial entitlements they are eligible for, and that policies are in place to support people on a low income to pay their rent and household bills.

"We have also long campaigned for an independent Commissioner for Older People and are pleased to see the Committee recognise the need for this role."

Earlier this week, Chancellor Rachel Reeves declared that a review into raising the State Pension age is required to ensure the system remains "sustainable and affordable". The UK Government review is set to report in March 2029 and Ms Reeves stated it was "right" to examine the age at which individuals can receive the State Pension as life expectancy rises.

The State Pension age currently stands at 66, but is scheduled to start increasing to 67 between 2026 and 2028.

A Government spokesperson informed the PA news agency: "Supporting pensioners is a top priority, and thanks to our commitment to the triple lock, millions will see their yearly state pension rise by up to £1,900 by the end of this parliament.

"We have also run the biggest-ever campaign to boost pension credit take-up, with nearly 60,000 extra pensioner households being awarded the benefit, worth on average around £4,300 a year. But we know there is a real risk that tomorrow's pensioners will be poorer than today's, which is why we are reviving the Pension Commission, to tackle the barriers that stop too many people from saving."