Pension credit ‘not the only way’ to tackle poverty

The government’s determination to roll out pension credits has been at the expense of other measures that could better tackle pensioner poverty, a new report warns.

Research by the National Audit Office (NAO) finds while increasing take-up of pensions credit by ten per cent would lift up to 107,000 people out of poverty, doing the same for housing and council tax benefits would improve the lives of 130,000 people.

Yet while ministers have been trying to reach their target of giving the pension credit to three million older people – a target they have missed – the take-up of housing and council tax benefits has fallen by five and ten per cent respectively since 1997.

Seven out of ten pensioners entitled to help with their housing costs but who are not claiming it are living in poverty, the spending watchdog warns.

“This report confirms that this government has become obsessed with meeting centrally set targets at the expense of delivering the benefits and services which will do most to lift pensioners out of poverty,” said shadow work and pension secretary Philip Hammond.

The NAO finds the Department for Work and Pensions (DWP) has made “real and substantial progress” since its last report in 2002, noting that £6 billion was given out in pension credits to 2.7 million pensioner households last year – a take up rate of about 69 per cent.

It warns that the target of providing three million pensioners with the credit by 2006 has been missed, but notes that some of this is due to people, particularly in the less deprived areas or among ethnic minority communities, making a conscious choice not to take it.

However, it says the efforts used to improve take-up of the pension credit should now be applied to other benefits targeted at pensioners, and a new target encompassing the help provided for housing and council tax should be introduced.

“Reaching those who are still not claiming is a formidable challenge, and requires the use of a number of different approaches, tailored to meet the needs of particular groups,” said auditor general John Bourn.

“I am pleased to see that more than one million more households receive pension credit than received its predecessor.

“Similar progress with other benefits should be the next step in pursuit of further progress towards what must be the overall goal: reducing pensioner poverty.”

Pension reform minister James Purnell said he would look at the committee’s recommendation “seriously”, adding that although the government was proud of what it had achieved, more could be done.

“We are determined not to lose any momentum as we move into implementing the reforms set out in our pensions white paper,” he added.

Help the Aged spokeswoman Anna Pearson said the government’s failure to meet its target was “extremely disappointing”, but urged it to act immediately on the NAO’s call for a wider approach to tackling pensioner poverty.

“That means better sharing of information in government departments to guarantee that pensioners get what they are entitled to,” she said.