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Britain's elderly forced into poverty by "failing" pension system

BRITAIN’S elderly are being failed by the pensions system and losing billions of pounds in unclaimed benefits, a damning report out today (Tuesday) claims.

Around a third of people eligible for a top up on their state pension don’t claim with many simply unaware they are entitled, according to ‘Later Life Ambitions’.

The document slams  the pensions system as “not the comprehensive safety net that most people expect” and warns of the growing elderly poverty crisis.

Figures show up to 1.6 million pensioners are losing out on pension credits with the total amount unclaimed estimated to be between £1.9 and £2.8 billion.

The means tested benefit was introduced in 2003 by the then Chancellor of the Exchequer Gordon Brown to top up the state pension.

Some four million people are entitled to claim pension credits which allow single recipients to top up their weekly allowance to £148.35 and £226.50 for couples - it is slightly different for people with savings or another income.

It costs the Government £351 per person to administer pension credits compared to £14 for the state pension with the high cost sparking claims elderly people are not being encouraged to apply.

The report, launched in Parliament by the NFOP, the Civil Service Pensioners’ Alliance, and the National Association of Retired Police Officers Association, also highlights 1.6 million pensioners currently struggle to make ends meet with 1.1 million just above the poverty line.

Malcolm Booth, chief executive of the National Federation of Occupational Pensioners (NFOP), said: “This report exposes the true scale of how the pensions system is failing our elderly who are still facing a choice of whether to heat or eat.

“There are people out there for whom the state pension is not enough, and the process of claiming pension credits is difficult with many people simply not knowing what they are entitled to."

The typical income in the first year of retirement is £11,000 – around minimum wage, according to the document. 

It claims more should be done to increase awareness of state entitlements with older people encouraged to claim pension credits.

It states: “Many older people do not claim the state benefits they are entitled to because they do not apply for Pension Credit. 

“Often they believe it is a benefit for the poorest of the poor, rather than for people like them. 

“They do not want to go through an intrusive means testing process, and we do not believe they should have to. 

“We strongly support moves to ‘repackage’ Pension Credit as an entitlement rather than a benefit.

“There is also an obligation on the political parties to make sure that those with the least are getting what they are entitled to.”

The report highlights difficulties faced by pensioners getting around with cuts made to local bus services.

Is says many older people are facing “isolation” and being deprived of visiting family or finding part-time work as a result.

It states: “The difficult economic climate has taken its toll on local bus markets, with cuts reducing the number of services available. 

“Some local authorities now spend nothing at all on transport.

“This has resulted in a significant reduction in the availability of concessionary bus services for older people. 

“There are growing concerns about poor frequency of daytime services in rural and more isolated areas, as well as vastly reduced services in the evenings and weekends. 

“In short, there is no point in having a bus pass, if there are no buses to use it on.”

The report calls for the triple lock system, which guarantees to increase the state pension every year by the higher of inflation, average earnings or a minimum of 2.5 per cent, to be protected.

It states: “The last five years have seen hugely significant changes in pension policy and provision.

“These will make a lasting impression on the UK pensions’ landscape, and more importantly on the pockets of currently and future pensioners.

“But more needs to be done to make sure that future generations plan for the prosperous and fulfilling retirement they rightly deserve.

“The first step is to increase understanding of state entitlements and communicate a clear message to those approaching retirement,

“The ‘triple-lock’ on state pensions, which ensures that pensioners are not exposed to wider economic shocks and are able to safeguard their standards of living, must also be protected.

“The triple-lock is only in place for the duration of the Coalition Government.”

A Department for Work and Pensions spokesman said: "We would like everyone who is entitled to Pension Credit to claim it and the Government has made great efforts to increase take-up.

"Anyone who wants to find out more about their entitlement to Pension Credit can do so simply and easily by calling us free on 0800 99 1234."