Wales

Unclaimed pension credit and BBC TV licence fee double whammy

Woman watching TV Image copyright Getty Images
Image caption Free TV licences will only be available to over-75s who claim pension credit from 2020

Nearly 80,000 households in Wales eligible for pension credit are not claiming it, figures from the charity Independent Age have shown.

With free TV licences becoming available only to people claiming the benefit, they could face a double whammy of losses.

Charities called on the Department for Work and Pensions (DWP) to do more so people know what they are eligible for.

The DWP said it wants everyone to claim what they are entitled to.

The 2019 analysis for Independent Age, by Grant Thornton UK, estimated about £214m of pension credit goes unclaimed annually in Wales.

From June 2020, free TV licences will only be available to over-75s who claim pension credit rather than everyone over 75, in a move the BBC says is "the fairest and best outcome".

The decision comes four years after the UK government announced the BBC would take over the responsibility for providing free licences for over-75s by 2020 as part of the licence fee settlement.

But it means those entitled to but not claiming pension credit will face paying for their TV licences on top of missing out on the benefit, which tops up weekly income to a guaranteed minimum level of £167.25 for a single person or £255.25 for a couple.

George McNamara, from Independent Age, said it was "a scandal" pensioners were missing out on an average of £2,675 per year each.

"It's money that should be in their pockets but isn't because of [UK] government inaction. The government is complacently allowing this situation to continue," he said.

"The government urgently needs to reform pension credit, especially given the proposals that, from 2020, the free for over-75s TV licence will only be available to people who receive it."

Pensioner watching TV
Getty Images
TV licence

  • £154.50Annual cost for colour TV

  • £745mEstimated cost to the BBC of current scheme by 2021/22

  • £250mEstimated cost of new scheme depending on take-up

  • 190,000people consulted on the change

  • 52%in favour of reforming or abolishing free licence scheme

Age Cymru's Michael Phillips said if everyone entitled to the benefit were to claim it, it "could help thousands of older people in Wales move out of a life of poverty".

"There are many reasons why older people do not claim," he said.

"They may not know the benefit exists, may be put off by the process of claiming, feel that there is a stigma attached to claiming benefits, or are living with dementia.

"Clearly, more must be done to support and encourage people to claim.

"Of course, the need to claim will become even more important once the BBC links the free TV licence to pension credit in June 2020."

A DWP spokesman said measures are taken to ensure people know what they can claim.

"Pensioner poverty rates have fallen dramatically in recent years - relative pensioner poverty rates have halved since 1990," he said.

"We want this trend to continue and we want everyone to claim what they are entitled to.

"Everyone who claims their state pension receives a letter which encourages them to contact us directly by telephone to discuss their pension credit entitlement."

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