Pensioners miss out on £2bn

Up to £2.1bn a year of pensions credit is not claimed by older people who are entitled to it, the Government admitted this week. Some 1.6 million pensioners are missing out.

The Department of Work and Pensions said just 2.57 million pensioners were claiming pension credit by the end of last year, well below its 3 million target.

Charities and MPs seized on the numbers yesterday, accusing the Government of failing to help many of the most needy members of society.

Anna Pearson, of Help the Aged, said: "These figures show in the starkest possible terms that Gordon Brown's flagship policy on pensioner poverty is failing to help many of the most vulnerable older people. Take-up has slowed almost to a crawl with an incredible £2bn a year left unclaimed, equivalent to a tax windfall to Treasury coffers of £5.5m every day. A new way must now be found to get this money to poorer pensioners."

Help the Aged is calling on the Government to ring-fence any unclaimed money, rather than allowing it to slip back into the Treasury's coffers.

David Laws, the Liberal Democrat Work and Pensions spokesman, said it was shocking that the Government had once again fallen short on its targets.

"Its failure to ensure that 3 million pensioner households are in receipt of pension credits highlights the ongoing failure of the Chancellor's means-tested machine," he said.

"Means-testing is simply unsustainable. The Government must accept that fundamental reform of the pension system is needed."