Pension Credit and Cost of Living Support Grant

Debate between Alex Burghart and Matt Rodda

Wednesday 26th October 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (Alex Burghart)]

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.

[Matt Rodda]

Would the Minister like to pay tribute to the last Labour Government for designing the policy?

[Alex Burghart]

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.

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.