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Tackling pensioner poverty: Encouraging take-up of entitlements

Head of the National Audit Office, Sir John Bourn, reported today that, in recognising the good progress made by the Department for Work and Pensions and other public bodies working with pensioners in encouraging benefit take up, more could be done. Although two million pensioners live in low-income households, many tens of thousand miss out on benefit entitlements annually – with up to £1.9 billion in income-related benefits lying unclaimed, according to latest estimates.

Today’s report to Parliament points out that the historical structure of the benefits system itself, the way it is administered, and pensioners’ attitudes to benefits all create barriers to take-up. The National Audit Office has examined what can been done to overcome these barriers. Action already taken includes the creation of The Pension Service in April this year, the redesign of the form for Minimum Income Guarantee to make it easier to claim, and a dedicated telephone claim line (the Minimum Income Guarantee Claimline – freephone 0800 0281111). But, according to Sir John, more could be done, by The Pension Service on its own and working with local authorities and voluntary bodies, who are often best placed to encourage take-up.

The National Audit Office’s work showed that different groups of people were more responsive to different types of benefit information and that many approaches to encouraging take up are inexpensive and appear to have considerable effect. Sir John sees the creation of The Pension Service as a major opportunity and welcomes its intention of adopting a more proactive and tailored approach to encouraging take up of benefit entitlements than under the former Benefits Agency and of working in partnership with other organisations.

Many low-income pensioners have little knowledge about the benefits available to them and tend to find out about them from relatives and friends, rather than official sources. Certain groups, such as pensioners in rural areas, those with sensory impairments, and pensioners from ethnic minorities, face additional barriers. There is scope to make details of pensions and other benefits available to older people better known among a wider audience, including the range of professionals who deal with pensioners.

There were 11 million pensioners in 2000. This number will grow by nearly 50 per cent in the next 40 years. It is estimated that in 1999-2000 between £930 million and £1,860 million in entitlements to income-related benefits was not claimed by pensioners. Between a quarter and a third of entitled pensioners do not claim the Minimum Income Guarantee (a median of £12.80 a week is unclaimed). Approximately one third of pensioners do not claim Council Tax Benefit, and one tenth of those entitled to Housing Benefit do not claim. Efforts to encourage take-up of welfare benefits can have a significant impact increasing incomes and tackling poverty. The National Audit Office report that many recipients spend additional money on essential items such as nutritious food, or heating and transport costs.

The introduction in 2003 of Pension Credit will make more pensioners eligible for additional entitlement. The size of the task for the Department in encouraging take up will be significantly increased.

Among the NAO’s other recommendations are that:

  • the DWP should set realistic and stretching national targets for the take up of Pension Credit and the Pension Service should ensure they are cascaded down to the local level;
  • the Department must have better and more detailed data on estimated non-take-up (including for particular groups such as ethnic minorities) to enable it to assess whether take up work is having an effect;
  • The Pension Service should evaluate what initiatives work and in what circumstances;
  • The Pension Service should build on the work it has already done to work in partnership with other bodies such as local authorities, voluntary bodies, and, where appropriate, other government bodies such as the Housing Corporation or the Department of Health; and
  • greater use should be made of existing routine contacts that many pensioners have with a wide range of professionals and other bodies, such as GPs and district nurses, so that the pensioners can be pointed towards reliable sources of information about benefits.

"Many tens of thousands of pensioners who live in poverty each year miss out on benefits to which they are entitled but which they fail to claim. Taking up these entitlements can have a significant effect on the lives of these pensioners since much of the additional money is spent on a range of essential items such as nutritious food and clothing. "The Department for Work and Pensions have made a start in addressing this situation, by making it easier to claim Minimum Income Guarantee and by establishing The Pension Service, but clearly more could be done. The Pension Service cannot tackle the problem of non-take up on its own. Others who provide services for pensioners such as local authorities and the voluntary sector also have an important role to play to encourage them to claim the money to which they are entitled."

Sir John Bourn

Notes for Editors

  1. To apply for the Minimum Income Guarantee, people should phone the Minimum Income Guarantee Claimline (freephone 0800 0281111). For Housing Benefit and Council Tax Benefit they should contact their local council. The Benefits Enquiry Line (freephone 0800 88 22 00) provides confidential advice and information about benefits for people with disabilities, their representatives and carers. Advice about benefits is also available from local offices of Age Concern and Citizens Advice Bureaux.
  2. The Pensioners' guide - Making the most of Government help and advice is available free of charge from 0845 606 5065 (textphone 0845 606 4064)
  3. Press notices and reports are available from the date of publication on the NAO website at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  4. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office employing some 750 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

 

PN: 67/02