Nearly 2 million pensioners failing to claim benefits

The Government is once again to write to the hundreds of thousands of pensioners that are eligible for the new pensions credit, but who are still yet to claim.

The Government is once again to write to the hundreds of thousands of pensioners that are eligible for the new pensions credit, but who are still yet to claim.

In its eight-month review of the credit, the Government admitted this week that it needs to do more to encourage people to take up the benefit, conceding that many are being put off by the means-testing system, and discouraged by the potentially small sums which they believe they will be awarded.

According to the Government's estimates, there are around 3 million UK pensioner households entitled to the new benefit, of which just 1.83 million are so far claiming. However, pension experts believe there are as many as 2 million who are entitled but not claiming.

Pensions credit was introduced last October to replace the Minimum Income Guarantee. While still guaranteeing pensioners a minimum income - of £105.45 a week for single people, and £160.95 for couples - it also pays a small additional sum of up to £20 a week for those who have modest savings.

Opposition parties have been critical of the handling of the new system, arguing it has brought unnecessary complexity to the state pension, as well as provided a disincentive for younger people to save.

Steve Webb, the Liberal Democrat's work and pensions spokesman, said: "It is simply shocking that the Government's eye-wateringly complex pension credit is failing to reach nearly 2 million people.

"As every month goes by pensioners are missing out on money they are entitled to. It's likely that many will never receive the much-needed extra cash. The only guaranteed way to get extra money to the poorest pensioners is by boosting the inadequate state pension."