Pensioners with the lowest income in retirement are receiving the least in State Benefits, across nearly all types of cash benefits, new research from Just Group finds has found.
As such the retirement specialist is urging income- poor pensioners to check their benefit entitlement as the cost-of-living crisis bites.
Analysis of recently published ONS data splitting retired households into five groups (quintiles) by annual income shows the bottom quintile received £9,254 a year on average in cash benefits including State Pension.
That is £116 a week less than the £15,311 received by the 4th quintile and £90 a week less than the top quintile whose overall income was more than five-times higher.
The bottom quintile also received the third lowest amount of Pension Credit at £258 a year – lower than the 2nd (£299) and 3rd quintiles (£272) – despite the benefit being aimed specifically at pensioners on low incomes.
Stephen Lowe, group communications director at retirement specialist Just Group, said: “The findings challenge the notion that most State support for retired people goes to those with the lowest income – in fact it goes to those in the middle and upper ends of the retirement income scale.
“The shared characteristic of retired people on the lowest incomes is that they receive less State Pension than any of the other groups, perhaps because they did not achieve the qualifying years needed or missed out on additional pension such as State Earnings Related Pension Scheme (SERPS) or State Second Pension (S2P).
“They also have lower levels of savings or investments which contributes to lower retirement incomes overall.
“Four in five of the retired people on the lowest incomes own their homes, a higher proportion than the middle quintiles, which means they can’t qualify for housing benefit.
“Our concern is that this may put these ‘property rich, income poor’ people off checking their entitlement to benefits – vital income for retired households facing a cost of living crisis. With pensioners already put under pressure by the government breaking the triple lock pledge, they now face soaring inflation with energy and food prices rocketing – missing out on benefits shouldn’t be another financial blow for retired households to bear.
“Government figures show that up to 850,000 families are missing out on £1.7bn of Pension Credit each year.
“These are not trivial amounts of cash either with each family who did not claim the benefits missing out on £1,900 per year.”
Research from Just Group’s sister advisory company, HUB Financial Solutions, also found that nearly half of over 65s who own their home (46%) said they have never checked their benefit entitlement.
Two in five (39%) of these said they assumed the value of their home meant they would not qualify so didn’t check.
