Pensions

TV licence changes could mean billions of pounds in unclaimed benefits for the over-75s

Pensioners in the UK could get billions of pounds in unclaimed benefits due to changes in free TV licenses

Pensioners could be set to collect billions of pounds in unclaimed benefits due to the changes to how free TV licenses work.

Under the BBC’s new rules, only over-75s who receive a benefit called pension credit will continue getting a free licence.

But Government figures show that only 40 per cent of the people who are eligible for this actually claim it.

Since the public outcry over the BBC’s decision to means test licences – people are becoming more aware of what pension credit is and how to apply for it.

Age UK says it has be “inundated” with calls from over-75s asking for help applying for pension credit in the past couple of weeks. The charity is running a petition to get the licencing decision overturned – which has already got over half a million signatures.

Recent figures from DWP suggest that there are around 650,000 households that should be getting the benefit but haven’t signed up.

Given a colour TV licence costs £154.50 – that means if everybody who is eligible applied, the BBC could end up receiving over £100million less in fees than expected.

But the government is likely to end up even further out of pocket. This is because pension credit isn’t just used to get a free TV licence. Its main function is to support lower-income pensioners throughout retirement.

To do this, the benefit guarantees that over-75s will receive a minimum income each week – £167.25 if someone is single and £255.25 for couples.

Moreover, Pensions Credit recipients usually don’t have to pay council tax, they get free dental treatment, they’re often eligible for housing benefit and get cold winter payments when the temperature drops.

They may also get discounts on utility bills through the Warm Home Discount scheme – a one off £140 discount paid from the government to the electricity supplier.

Because take up of pension credit is so low, the government isn’t having to pay out lots of these benefits.

If the 40 per cent of over-75s who have not been claiming pension credit start doing so, the government could find itself paying billions of pounds.

For instance, one week of cold weather alone between November and March could cost the Treasury an extra £16.35million.

Charity director at Age UK, Caroline Abrahams said that ever since the BBC announced its decision to means test the free TV licence from June 2020 they have been inundated at Age UK with phone calls, emails and petition sign ups, to the extent that their IT has sometimes struggled to cope.

According to official Government figures [650,000 people] don’t claim the Pension Credit which is their due, two in five of all those eligible. As a result the Government pockets £3.5 billion a year – a sum that would fund a free TV licence for every 75 year old more than four times over, she said.

Helen Morrissey, pension specialist at Royal London, added that Pension Credit is designed to help the very poorest of pensioners and yet figures show many are yet to claim it.

She said that this money could have a significant impact on these peoples’ standard of living and acts as a gateway to a host of other benefits.

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