Pension Credit take-up costing health, social care systems an extra £4 billion per year

The failure to deliver Pension Credit to 1.06 million older people who are entitled to it is costing the health and social care systems in Great Britain an estimated £4 billion per year, says older people’s charity Independent Age.


Pension Credit, a benefit designed to keep the least well-off pensioners out of poverty, is currently being received by just six in 10 (61%) of those who should be receiving it – leaving many on a threadbare income and having to choose between heating and eating.


New research from the Centre for Research in Social Policy at Loughborough University, commissioned and published by Independent Age, has found that the low take-up is creating significant knock-on effects for the NHS and social care, costing taxpayers an estimated £4 billion per year.


This bill to the taxpayer is significantly higher than the annual cost of giving pensioners the £2.2 billion to which they are entitled but are not receiving.


Report authors Professor Donald Hirsch and Dr Juliet Stone found that the NHS bears the brunt of the additional demand, with pensioners on a low income likely to need more health care and services, such as prescriptions or the use of a hospital bed. The resulting costs to health care systems are estimated to be between £3.02 billion and £4.81 billion per year.

Those missing out on Pension Credit are also more likely to need social care – whether residential or home-based – which incurs additional costs to the state of between £66 million and £189 million per year.


The report concluded that if Pension Credit take-up was lifted from 61% to 100%, then almost 450,000 pensioners could be lifted out of poverty, reducing pensioner poverty to its lowest ever level, and resulting in substantial savings to the NHS and social care systems over the long term.


Independent Age is calling for the Government to put in place an ambitious, publicly available action plan detailing how it will work to increase the uptake of Pension Credit over the next five years.