Pension Credit and Cost of Living Support Grant

Anne McLaughlin Excerpts

Wednesday 26th October 2022 Westminster Hall

[Anne McLaughlin (Glasgow North East) (SNP)]

I beg to move,

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.

[Richard Foord (Tiverton and Honiton) (LD)]

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—

[Richard Foord]

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.

[Anne McLaughlin]

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.

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?

--- Later in debate ---

[Anne McLaughlin]

To clarify, I was blaming individual politicians and sections of the media for besmirching the character of people in receipt of social security payments. I am not suggesting that the UK Government are doing that. What was the increase in the number of people applying for pension credit after that campaign? What was done in the run-up to the crucial deadline of 19 August, and what will the Government do in the run-up to December, because that is an important incentive for people. It is not enough to have the £324, but it will act as an important incentive.

[Alex Burghart]

I thank the hon. Lady for her clarification. I have not heard any colleagues use that sort of language. I will answer her point in my speech.

We continue to work closely with a whole range of stakeholders, including Age UK, Independent Age and Citizens Advice, which have reach and expertise to identify other practical initiatives that will help encourage eligible pensioners to claim. On 15 June, the DWP had a second pension credit day of action with the media, in which we encouraged the media to reach out to pensioners, their family and friends. Thanks to that day of action, we recorded a 275% increase in claims in the week of 13 June this year, compared with the same week in 2021. The DWP has received unprecedented volumes of new claims for pension credit. Weekly claims tripled between December 2021 and August 2022, so we are seeing a genuine increase in traffic. Obviously, the quoted figures for uptake are about 70%, and the uptake for guarantee credit, which is the main safety net within pension credit, is 73%. Those figures are from 2019-20, before the current days of action and the campaign push, so we very much hope the next set of figures will be some way above that.

Prior to that campaign, the previous Minister for Pensions, my hon. Friend the Member for Hexham, wrote to all MPs to request their support. It has been heartening to hear all the Members who have spoken today give evidence of how they responded to that request. I know there is still work to do. The latest available estimates show that there are still substantial numbers of people who may be eligible for pension credit but are not claiming it. That is why we continue to encourage everyone to reach out to their own networks and use resources such as the pension credit calculator on gov.uk. By working together, cross-party, we can ensure that those eligible for pension credit receive the support they need.

It is particularly important that we encourage those eligible to make a claim because for those above state pension age, eligibility for the means-tested benefits cost of living payments is determined through pension credit entitlement. The £650 cost of living payment will help to ease the pressures that pensioners are currently facing. The payment was designed to target those on low incomes, which is why a household will automatically receive a cost of living payment if they are eligible to receive a pension credit payment during the qualifying period. We did this because we needed to get a big system up and running at high speed. We found it was the quickest and most effective way to deliver support to more than 8 million people on the lowest incomes.

[Anne McLaughlin]

I appreciate the Minister taking another intervention—I am doing so to help his throat and give him the chance to have a glass of water. If he is saying, “It was set up quickly because we had to help people as a matter of urgency,” that is good. However, we have now had time to think about it. I have written several times and been campaigning on this, but he has not yet answered the question: will he extend the deadline to 31 March, or will he consider extending it? Will he not say no today? Will he give people a little hope that they might get it? He is making the clear point that it is for households in absolute need. Well, they are still in absolute need—

[Peter Dowd (in the Chair)]

Order. You are bordering on making another speech, rather than an intervention.

[Anne McLaughlin]

I am trying to help the Minister’s throat.

[Peter Dowd (in the Chair)]

I appreciate that. Will you respond, Minister?

--- Later in debate ---

[Anne McLaughlin]

I thank the Minister for his response. He said that the number of claims increased by 275% during the week of pension credit awareness day. That seems to me to be an argument in favour of having more than one such week. If everybody who was entitled applied and the number of claims increased, how many weeks would it take to eradicate pensioner poverty? Perhaps I will go and work that out.

The Minister said that the deadline is 19 December. On the strategy of telling people, “Apply for this because you will also get an extra £324”—which is a real incentive, though not as much as £650—he said that a range of measures are being looked at. I would like to know more about them, so perhaps he could write to me. The advertising campaign that he mentioned sounds great, but I could not find it on YouTube, so it was not that high profile.

The Minister said that the Treasury is spending £134 billion on social security and extra cost of living payments this year. An extra £2 billion of support is a drop in the ocean for the UK Government, but not for the individuals who receive it. Let us not forget that it costs us £4 billion extra not to pay that money. I could introduce the Minister to people who told me how pension credit enabled them to live life again. They are not talking about partying or living the life of Riley; they are talking about being able to relax and be part of society. Do they not deserve that after working hard all their lives?

This might be because of the Minister’s throat, but I did not hear him say a hard no with conviction. I will take that as a sign that, at some point, he will accept that pension credit is different from other social security payments, in that it has incredibly low uptake, in part because people think that they should not have to ask the Government for money. I will continue to argue that the Minister should make a special case and extend the deadline to 31 March. I look forward to continued discussion with him.

Question put and agreed to.

Resolved,

That this House has considered pension credit and the cost-of-living support grant eligibility period extension.