That this House has considered pension credit and the cost-of-living support grant eligibility period extension.
It is a pleasure to serve under your chairmanship, Mr Dowd. I am not going to go through all the stats that demonstrate that far too many older people live in poverty. I expect others might do that, but I also think we are all in agreement about it. I know that we are all in agreement that the uptake of pension credit—the social security payment that goes only to the very poorest of our pensioners—is, at around 60%, far too low. I know this because the Conservative UK Government have an annual pension credit awareness day and, whenever we have talked about it in Westminster Hall or in the main Chamber, everyone says something more has to be done.
My ask today is for the Government to agree to something that could see the biggest ever increase in uptake of pension credit. I published an early-day motion to that effect, I presented a petition on the Floor of the House and I wrote to myriad Chancellors and Ministers, so far to no avail. My ask, as the motion says, is to extend the deadline for eligibility for the £650 cost of living payment, because the deadline for that crucial help has passed. Anybody applying after 19 August 2022 may well get pension credit, but crucially they will not get that £650. That, I believe, is what could make all the difference in convincing people to apply. It is not enough, in my view, but it is a significant amount that could act as a real incentive when we are all collectively trying to increase uptake.
I have a few other asks before I come to the substance of the debate. I appreciate that those who successfully apply by a date in December will receive half of the payment, which is £324. Although I will argue that they should get the full amount, I would like to know the exact date in December, because there is confusion about that. What strategy will the Government put in place to raise awareness of that entitlement? I do not mind if they do not know yet, as long as they agree to look at it seriously and urgently.
I am concerned about that, because I question what strategy was in place to make people aware in the run-up to the 19 August deadline. I certainly did not see any evidence of it, which makes it something of a missed opportunity. In my constituency, I had a strategy to let people know; when people knew, four of my team spent a day and a half helping a steady stream of constituents make their applications. What did the Government do to raise awareness?
I am sure there are pensioners who would also be grateful if the Minister could tell us what the situation is with the triple lock guarantee on pensions.
Pensioner poverty is a significant issue, particularly in my constituency, where 25,000 people receive the basic state pension. I am very concerned at how hard it is to find out how many of those 25,000 are eligible for pension credit but are missing out on that vital support, which could be the difference between putting food on the table and turning the heating on this winter or not. At one time, the Department for Work and Pensions monitored eligibility for pension credit—
I am suggesting that the Government should pledge not only to keep the triple lock on pensions but to restart monitoring so we can get support to the people who really need it.
I could not agree more with the hon. Gentleman. It is really important that we monitor it. We are talking about the people in these four countries who are the very poorest and really need that help.
The former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), clearly said at Prime Minister’s questions last week that the triple lock would apply. That seemed to be a little surprising to the Chancellor. Now that we have a new Prime Minister, but the same Chancellor, does the Minister know whether they will renege on that or keep to the Government’s word?
Finally, something that pensioners and others are desperately worried about is the uprating of social security entitlements—or benefits, as they are called here. Can the Minister tell us what is happening with that? Coming back to the main thrust of the debate, I believe that if the deadline is extended and anyone who successfully applies for pension credit by 31 March next year is also entitled to the £650 cost of living payment, it will act as a significant incentive and will enable us, together, to convince people to apply.
Let us look at some of the reasons why 40% of those who are entitled to pension credit do not apply for it, why £7.7 million goes unclaimed in my constituency of Glasgow North East and why £2.2 billion goes unclaimed in the UK every year. On that £2 billion, I appreciate that if everyone took up their entitlement it would cost the Treasury a lot of money. However, failing to deliver pension credit to every eligible person costs the UK an estimated £4 billion a year in increased NHS and social care costs. That is according to research commissioned by Independent Age and carried out by Loughborough University. That sounds to me like we would be almost £2 billion better off. More importantly, it would eradicate pensioner poverty almost entirely.
There are lots of reasons why people do not apply, but I will look at the three main reasons: stigma, a perception that the process is complicated and not knowing about it. I thank Independent Age, Age Scotland and Age UK for all the work they do and for meeting me on Monday to discuss the debate. The one thing that they had all repeatedly found was that many older people who do know about pension credit, and who even know how to apply, still do not because they are too embarrassed. They talk about the stigma and how they believe they should be able to cope. They talk about not accepting charity handouts.
It is a pleasure to serve under your chairmanship today, Mr Dowd. I thank the hon. Member for Glasgow North East (Anne McLaughlin) for securing this important debate. I fully support her call for the Government to extend the eligibility period for the £650 pension credit cost of living grant to the end of the financial year.
Independent Age’s analysis of Government figures shows that around one in six older people in the UK live in poverty. Many are already struggling to afford essentials, and with spiralling energy prices and the general cost of living, that is set only to get much worse. I welcomed the support grant itself, and the plan for an additional £300 pensioner cost of living payment. However, sadly, as hon. Members have heard, Independent Age suggests that more than 850,000 pensioners in the UK do not even receive the pension credit to which they are entitled. That is likely due to a combination of digital exclusion, apprehension about applying and social stigma—and that is before they are even eligible for the extra cost of living payment. We must remember that pension credit is a financial top-up for some of the pensioners who are most in need in this country. In many cases, it means that people do not have to choose between heating their homes and eating. Nobody in the world’s fifth biggest economy should ever face that choice.
A great campaign run by Greater Manchester Housing Providers, Independent Age, Age UK Salford and Citizens Advice Salford has been supporting people to take up their pension age benefits. As of June 2022, it estimated there is over £6.3 million of pension credit unclaimed this year in Salford alone. Independent Age estimated that if everybody who is eligible received pension credit, roughly one in three pensioners in poverty would be lifted out of it. That is the impact these payments have on people’s lives.
The Government must step up to ensure that our pensioners—our grandmothers, grandfathers and elderly friends—receive the support they are entitled to in the first place, as well as the additional crisis support. They certainly should not be excluded due to short, strict deadlines when we know that these exclusion factors are already at play. This is not just about compassion; as we heard from the hon. Member for Glasgow North East, Independent Age estimates that low uptake of pension credit costs the Government £4 billion a year in increased NHS and social care spending. These deadlines are an arbitrary, cruel barrier that the Government are choosing to impose, but they can easily amend them in this time of crisis.
It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing this important debate.
We have already heard about the considerable benefits of pension credit and the support it can provide to pensioners in need. I am proud that the previous Labour Government introduced pension credit to tackle the Tory legacy of pensioner poverty. Worryingly, the Department for Work and Pensions itself admits that almost 1 million pensioners are failing to claim money that they are owed. We need to be clear that this is not charity or a handout; this is money that people are entitled to. An eye-watering £1.7 billion in pension credit is left unclaimed. Just think about the difference that would make to pensioners across the UK who are dealing with the Conservatives’ cost of living crisis. It really is deplorable that the Government allow so much money to go unclaimed, especially at such a difficult time.
I want to reflect on an event I held at the beginning of this month, a pension credit day of action, with my two local citizens advice bureaux in Merthyr Tydfil and Rhymney. I contacted more than 6,000 people who were likely to be under-claiming pension credit and encouraged them to attend an open day, where Citizens Advice staff helped them to apply. I am delighted to report that over 200 people attended, with many more making contact before and after the event. In fact, during a door-knocking session last Friday, I spoke to another lady who was unable to attend the action day itself, but she will be contacting Citizens Advice to seek its support. In addition to making applications for pension credit, the amazing staff and volunteers at Citizens Advice identified unclaimed eligibility for attendance allowance, personal independence payments and council tax reductions. Incredibly, in just one day we were able to increase income via benefit take-up by over £200,000. As my local citizens advice bureaux stated, in a cost of living crisis that support is simply invaluable. That shows that the Government could, if they chose, take a more targeted approach to ensure that no one eligible for pension credit misses out.
It is a pleasure to serve under your chairmanship, Mr Dowd. I thank my hon. Friend the Member for Glasgow North East (Anne McLaughlin) for securing this important debate. She spoke incredibly eloquently and framed this debate extremely well. She is a passionate advocate on this subject, and is truly a champion of the cause.
The Back Benchers who have spoken today are correct: pensioners are facing the brunt of this cost of living crisis, which has been exacerbated by Tory mismanagement of the economy. It is imperative that we do all we can to support pensioners. As my hon. Friend the Member for Glasgow North East noted, pensioners across all four nations of the UK receive the lowest state pension, as a proportion of pre-retirement wages, of any country in north-west Europe. In a recent report released by the Joseph Rowntree Foundation, 2.1 million pensioners, almost a fifth of all pensioners, across the UK were classified as living in poverty. That number continues to grow and is a direct result of a decade of brutal Tory austerity.
As the hon. Member for Salford and Eccles (Rebecca Long Bailey) stated, the cost of living crisis has left pensioners making the difficult decision of whether they can afford to buy essentials. Age UK has warned that pensioners have had to switch off vital medical equipment to save on energy costs. This is not pensioners spending their money on luxury items. This is a crisis that threatens some of the most vulnerable in our society, and it is likely to worsen as we approach winter.
Although the support announced by the UK Government, particularly the £650 cost of living payment, is welcome, it is important that decisive action be taken to ensure that all those eligible for payment receive it. As has been stated, to qualify for that support, people must first be eligible for pension credit, but only seven in 10 of those entitled to the credit claim it. That means that each year more than £1.7 billion goes unclaimed; that represents more than 800,000 families not receiving the money to which they are entitled.
It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing the debate, and I thank everybody who has spoken on this important subject.
Families and pensioners across the country face an unprecedented cost of living crisis. They need help and support at this difficult time, and it is important that questions be asked about the nature of the Government response. I turn first to the scale of the cost of living crisis. There is no doubt that we face a crisis, the like of which has not been seen since at least the 1950s. Costs faced by families and pensioners have risen dramatically: the cost of energy is going up, the cost of food is going up, and the overall cost of living is going up.
I want to focus on some specifics, including the recent data on inflation. We learned yesterday that everyday foods have risen by over 10%, which hits pensioners and others on low incomes very hard. For example, the price of a loaf of bread has risen by 37.6%, and the cost of tea has risen by 46%. These are dramatic rises that show the importance of pension credit. The benefit was designed to help pensioners on very modest incomes, and it is an important legacy of Gordon Brown’s leadership, both at the Treasury and as the UK’s Prime Minister, during the last Labour Government. The current Government are failing to encourage sufficient take-up of this important benefit, and we should bear in mind that many of the recipients of pension credit are women, while others are disabled.
As discussed earlier, nearly 1 million pensioners are eligible for this important benefit but go without it at the moment. That is a total of £1.7 billion unclaimed—to put it another way, that is £1,900 for every qualifying household missing out. It is a staggering sum of money that could make a real difference. This is particularly important because pension credit unlocks other benefits, such as free TV licences for the over-75s. Questions to the Department for Work and Pensions have revealed that the Department is spending approximately £1.2 million on increasing the take-up of pension credit, yet it is still failing to achieve a sufficient level of awareness, as we have heard. A Labour Government would treat this issue very seriously. It would be one of the key priorities for the Department, and we would work really hard to encourage take-up.
It is a real pleasure to serve under your chairmanship, Mr Dowd. I hope that hon. Members will forgive me; I am losing my voice, but I will try to speak as clearly as I can into the microphone. I thank the hon. Member for Glasgow North East (Anne McLaughlin) for securing this important debate on an important subject. I pay tribute to her campaigning work, because helping people to realise the benefits to which they are entitled helps everybody in society. I know she understands that.
My Department will always welcome opportunities to explain what we are already doing to support pensioners. We know the importance of ensuring that people up and down the country are looked after, post retirement. This topic is particularly pertinent given the recent increase in the cost of living. We are taking this challenge incredibly seriously, which is why we have spent more than £37 billion this year on cost of living support, as well as delivering on the energy price guarantee.
This financial year, total expenditure on benefits for pensioners will be well over £134 billion, which represents about 5.4% of GDP. This high investment ensures that the basis of our safety net for pensioners—the full yearly basic state pension—remains strong. It has brought the British state pension in line with that in other OECD countries. The amount that we provide is higher than it is in countries such as Switzerland, Norway and Germany. One of the major successes of this Government, auto-enrolment, has led to over 10.7 million extra employees paying into a workplace pension, so that they can save for a safe and secure future. The issue is particularly pertinent today, because it is the 10th anniversary of auto-enrolment.
I certainly pay tribute to the last Labour Government, as well as the Pensions Commission, which had cross-party support, and the support of organisations such as the Centre for Social Justice, which I used to work for. Steve Webb, formerly of the Liberal Democrats, also contributed to that work. It was, however, the coalition Government, led by the Conservatives, and my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), when he was Secretary of State for Work and Pensions, who made it happen. All that good work has had a demonstrable effect: in 2021, 400,000 fewer pensioners were in absolute poverty than when the Conservatives came to power. That is a remarkable achievement of which we are rightly proud.
To complement the state pension, pension credit—mentioned a number of times in this debate—offers an extra layer of support for people over state pension age and on a low income. Pension credit provides an invaluable top-up to a person’s state pension, ensuring that single pensioners receive a minimum of £182.60 per week and couples receive at least £278.70 per week. Crucially, as other hon. Members have mentioned, pension credit acts as a passport to other help, including for rent, council tax and heating.
A comprehensive benefit package including pension credit is only worth while if claimants access the support. We are aware that, historically, take-up of pension credit has been too low. To increase pension credit awareness, in April we launched a comprehensive paid advertising campaign, including a promotional video fronted by Len Goodman of “Strictly Come Dancing” and my predecessor, my hon. Friend the Member for Hexham (Guy Opperman), who did so much in his five years in the job to improve opportunities for people planning for their pensions and claiming them. That campaign has now been viewed well over a million times. The campaign further focused on encouraging the private sector to help drive up claims and reach those who may be reticent about claiming pension credit.
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Some politicians and some sections of the media have got a lot to answer for here. I have not heard anyone calling pensioners workshy, greedy or layabouts, but that is how so many talk about other people who are in receipt of benefits. If is rife, it goes largely unchecked and, while they may not be talking specifically about pensioners and pension credit, the impact on pensioners and the resulting feeling of shame among them is real. It is stopping people applying and we need to stop that. The rest of us need to call it out when it happens.
The Government have to say as loudly, as clearly and as often as possible, exactly what I said when I toured bingo halls, lunch clubs and pensioner groups in my constituency in the summer, trying to get people to apply. The Government need to say, “This is your legal entitlement. This is not charity. You have worked for this. You have brought up families. You have made your contribution to society. Thank you. Now please apply for your legal entitlement.” That is what the UK Government have to say when rolling out the awareness-raising strategy I mentioned earlier. Although I did not see any response from the Minister at that point, I sensed agreement that that would happen.
The second issue is that it is perceived to be complicated to apply. Between them, my team applied for around 60 people and found the online process to be fairly straightforward, but that is because they are au fait with technology. Many older people do use it, but many more are frightened by it. I realise that there are other ways to apply, but there is the perception that it will be difficult. We need to work on that, and we need to fund those organisations that help people make their applications when they are struggling.
There are a lot of other reasons why the 40% not apply, but the final one I want to talk about is simply not knowing that pension credit exists. I leafleted thousands of people in my constituency. I focused on some of the poorest parts of Glasgow North East, letting them know about pension credit and offering to help them apply. The phone rang off the hook. We were truly overwhelmed by the response, but also taken aback by the number of people who said, “I have never heard of pension credit. What is it?” There is clearly a massive job to be done to let people know.
I raised this matter in the Chamber in 2020 and was told that there was a poster campaign in GP surgeries, but nobody was getting into GP surgeries then because of lockdown. It did not sound as though anything else was being done to make people aware. A proper professional strategy would look at multiple ways to let people know. Industry professionals will say that someone needs to see something advertised between seven and eight times before it properly sinks in. One day of action a year is not nearly enough.
Age UK has a fantastic briefing on how to get the message across to the right people. The Work and Pensions Committee has called for a proper strategy. Wales and Scotland have benefit uptake strategies. Indeed, in Scotland it is a statutory duty: sections 8 and 9 of the Social Security (Scotland) Act 2018 say that Scottish Ministers must prepare, publish and lay before Parliament strategies to promote take-up of Scottish social security assistance. We need a full strategy for pension credit uptake, and there is no better time to do that than this winter.
That brings me to why I want the deadline to be extended, effectively to the end of winter. When I started talking to people in the constituency about the deadline of 19 August, I got lots of blank looks. A lot of people paid lip service and said they would have a look and maybe apply, but when I mentioned the £650 cost of living payment they would get if they were successful in their application, many of them started to take it more seriously, because they were starting to be concerned about predicted rises in energy costs.
Notwithstanding the fact that so many people do not know that it exists or how to apply for it, for those who do but feel they should be able to manage and are too embarrassed about taking money, it might be only this winter that the message really hits home. If someone is told in the middle of summer about help they can get for heating later in the year, it does not have the same impact as finding out about it in the dead of winter. It is easy when the sun is shining to think, “I’ll be fine.” That is especially so if the mindset, as it often is with this generation, is, “I should be able to manage.” But when someone is sitting at home, so cold that their bones are aching and they have had their one hour of heating, and they now have to hope that the cardigan and blanket are enough to keep them alive, and despite that frugality they are staring at a massive bill they cannot pay, that is when we will be able to get the message across that they could get an extra £650 of help, as well as extra money every week. That is when, for those people who are desperate to manage without so-called handouts, it will stop being a choice. They will have no option but to apply for pension credit—the thing we all say we want them to do.
If the Government do not change their mind, and do not extend the deadline to the end of winter, those people will still be sitting, freezing, in pain. They will still be being frugal, and will still be hit with eye-watering bills that they cannot pay. Then, all they will have is the knowledge that they could have had an extra £650, had they not been too embarrassed to apply back in August.
What about those older people who just did not know? With the pain of the cold reducing them to tears, nobody to turn to for help and no way of paying their bills, someone tells them about the pension credit that they knew nothing about. Then they say, “But you’re too late for the £650.” How will that help to dry their tears? It will not. It will simply devastate people further to know that the money was there, that the Government believed that they needed it, that they had been entitled to it, and that, despite needing it, they will be denied that help. How will that make them feel, and how are they supposed to survive this winter?
What I am asking for is simple. Currently, any pensioner who was entitled to pension credit by 25 May this year and applied for it by 19 August will get an extra £650 to help with the cost of living crisis this winter. Any pensioner who was entitled to pension credit by 25 August this year and applied for it by December will get half that amount—an extra £324. Let us recognise how hard this winter will be, and how much literally freezing will concentrate people’s minds. Let us extend the deadline from 25 May, before the summer, to the end of winter: 31 March 2023. Let us say that anyone who becomes entitled to pension credit before 31 March next year and applies for it by then will also get the full £650. Let us do it without interruption to the payment dates for those who are currently entitled.
Then, let us get in the professionals and get a proper advertising strategy up and running. Let us tell people, “This is your legal entitlement.” I want to hear the Minister say that with passion and conviction. Let us help people to apply. Let us not look back on this year as the year that the UK Government completely neglected the pensioners of our four countries, just when those pensioners needed the Government the most. Instead, when we are through the cost of living crisis, let us look back and be proud that there are hundreds—hopefully thousands—more pensioners receiving the pension credit to which they were always entitled, and which enables them to enjoy life a bit more.
There is no excuse for not extending the deadline. It would make all the difference to whether older people eat, heat and live or die. If the Minister cannot say yes today—I understand that this is a new Government—I implore him to at least agree to give it serious consideration. If he is says no, can he tell us what possible justification he has?
Alongside that, the Government should confirm as a matter of urgency that they will increase income top-ups such as pension credit, not just the state pension, in line with inflation according to the consumer prices index or the higher rate of the pensions triple lock. They should also look urgently at increasing all benefits in line with inflation. According to recent figures from the Resolution Foundation think-tank, the number of all people living in absolute poverty in the UK is projected to rise by 2.9 million between 2021-22 and 2023-24. A real-terms benefit cut would add another 600,000 people to that rise, including 300,000 children.
These are our most economically vulnerable households, and if the magical, mythical unicorn of compassionate conservatism that the Chancellor referred to recently is to be given any meaning at all, the Government can start today by extending the pension credit cost of living grant deadline and uprating benefits and pensions in line with recent inflation figures.
I hope that the Minister can tell us a little more about what the Department for Work and Pensions can and will do. I know, it knows, we all know, that many people are eligible but not applying. The DWP knows far more of the detail of who may be eligible, so why does it not contact them directly to encourage them to apply? That would, as we have heard, help to eradicate pensioner poverty and, in a cost of living crisis, make a life-changing difference to some of the most vulnerable people in our communities. The DWP can do more. The question for the Minister today is: will it?
As the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) mentioned, it is vital that we do more to ensure that all those eligible for pension credit receive it. It is deeply worrying, given the difficult financial times that we face, that so many families are not receiving the support for which they are eligible, so I echo the calls from all Back-Bench MPs today—well, the two Back-Bench MPs from Opposition parties, because there is none from the Government party. I echo their calls for the UK Government to take decisive action to ensure greater uptake of pension credit. It is critical that people understand that support is available to them.
As Member of Parliament for Airdrie and Shotts, I receive regular correspondence from pensioners asking for advice. The hon. Member for Merthyr Tydfil and Rhymney spoke of citizens advice bureaux. The Airdrie citizens advice bureau does a fantastic amount of work helping pensioners; actually, today it has its annual general meeting. However, studies have found that 45% of people in my constituency are worried about the future of their pensions. That is why it is so important for the UK Government to extend the eligibility period deadline to ensure that those who have failed to apply in time receive the extra payment. The level of support available can make all the difference during these times.
The Minister must commit to introducing a proper strategy to ensure that the benefits reserved to Westminster are given to those who are entitled to them. The UK Government would do well to copy the strategy of the Scottish Government, who see welfare payments as an investment in society, and so implement strategies to ensure the maximum uptake of benefits. I ask the Minister to agree to the ask of my hon. Friend the Member for Glasgow North East, and to specifically clarify what steps he will take to ensure that pensioners are aware of the financial assistance available to them.
It is clear that the only way we can ensure that Scottish pensioners and those across all four nations can receive dignity and fairness in retirement is by having full powers of independence. Time and again, the Westminster-based Tory Government short-change pensioners, whether it be through cutting pension credit for mixed-age couples, which costs some people thousands of pounds, or through the injustices faced by Women Against State Pension Inequality Campaign women. It is clear that Scotland cannot wait for Westminster to act.
In the remaining time available to me, I ask the Minister three questions. As we have heard, there is a lot that the Government should be explaining. First, what is the Government’s plan to support pensioners and working families, in both the short and long term? Secondly, how will the Government control inflation and bring down the spiralling cost of living after causing this cost of living crisis? Thirdly, how will Ministers increase the take-up of pension credit for those who urgently need it? I hope the Minister is able to respond to those questions, and to the other points made in the debate. I ask him to commit in writing to responding to me on this issue.
I appreciate that time is pressing and the Minister needs to respond. Let me reiterate the scale of the crisis that we face, and the need for a clear and consistent response. I urge the Government to do a much better job of encouraging take-up of this very important benefit.
As the hon. Member for Glasgow North East said, no one should feel ashamed about claiming this money. The reason why we have it is so that people can come forward and take it. We want them to have it. Success for us is 100% of people claiming it. I do not think she was implying that the Government sought to stigmatise people who claim benefits—we absolutely do not. We have created a benefits system that is designed as a safety net to support the most disadvantaged in society, but also to help people who are capable of work to move into work.