Pension Credit: Guy Opperman discusses ongoing scheme
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Pensioners who are on a low income may often have to stretch their state pension payments to help them cover retirement essentials as well as other costs. It may be difficult living on a low income in retirement, as it may limit the goals older people are able to reach. However, these individuals are receiving the least in state payments, across nearly all types.
Research from HUB Financial Solutions uncovered the extent of the issues potentially faced by those on a low income.
The Office for National Statistics split retired households into five groups which are dependent on annual income.
Analysis of this data showed the bottom quintile receives £8,833 a year on average in payments, including the state pension.
However, this is £84 per week less than the second quintile group who received £13,220.
It is also more than £100 a week less than the top quintile, whose overall income is five-times higher.
These figures show the four-fifths of retired households with the highest incomes are receiving at least 50 percent more in benefits and payments than those on the lowest incomes.
As a result, low income pensioners may wish to check their entitlement to receiving further support to redress the balance.
Simon Gray, Managing Director at HUB Financial Solutions, commented on the matter.
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He said: “The findings challenge the notion most State cash goes to the poorest pensioners – in fact it goes to those in the middle of the income scale.
“The characteristic of those retired people on the lowest incomes is that they receive less state pension, perhaps because they did not achieve the qualifying years needed or missed out on additional pension such as State Earnings Related Pension Scheme (SERPS) or State Second Pension (S2P).
“They also have not managed to save or invest as much, either inside or outside private pensions which has also contributed to lower retirement incomes.
“Our concern is that these ‘property rich, income poor’ people may be put off checking their entitlement to benefits.”
In this regard, Britons can take action in order to rectify the issue and receive more support.
An often neglected form of help, Mr Gray went on to highlight, is Pension Credit, which is overseen by the DWP.
Pension Credit is designed to help people with their living costs if they have reached state pension age but are on a low income.
The payment is also intended to help older people with housing costs such as service charges or ground rent.
With individuals able to get Pension Credit even if they have other income such as savings or their own home, it could provide a great deal of support.
However, Government figures have shown about a million families are currently missing out.
It is estimated some £1.8billion of Pension Credit each year is currently being missed out on, meaning some will be receiving far less support than they actually need.
Older people will be able to claim Pension Credit from the DWP but will need certain information to hand.
- National Insurance number
- Information about savings, income and investments
- Bank account details
Britons are able to start their application for Pension Credit up to four months before reaching state pension age.
They can apply at any time, but should bear in mind their claim can only be backdated by up to three months.
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