DWP sending letter to 'all pensioners' in this group as they could get extra £3,900

The Department for Work and Pensions is writing a letter to pensioners as they could get an extra £3,900 a year in payments. Hundreds of thousands of people are thought to be missing out on Pension Credit, with the average claim worth £3,900 or more.

The Government was recently asked about what it is doing to get more people to apply. DWP minister Torsten Bell spoke in his response about the DWP's latest efforts to raise awareness.

He said: "We are now writing to all pensioners who make a new claim for Housing Benefit and who appear to be entitled to Pension Credit - directly targeting this group and encouraging them to make a claim.

"In the longer term, we will be bringing together the administration of Pension Credit and Housing Benefit, so that pensioners receive both Housing Benefit and any Pension Credit that they are entitled to."

The DWP also sent out a leaflet about Pension Credit, along with the letter that went out to state pensioners about their payment increase this month.

Pension Credit provides a top-up to your weekly income, as well as access to other Government support such as a free TV licence for those aged 75 and over, and help with some NHS costs.

The top-up increases a person's income to £227.10 for single claimants and up to £346.60 for couples. You may entitled to additional amount, such as if you have other caring responsibilities or are disabled.

The Government launched a campaign to invite people to apply after it changed to eligibility for the Winter Fuel Payment last year, so you needed to be claiming a certain means-tested benefit, such as Pension Credit, to apply.

Prior to this, the Winter Fuel Payment, worth £200 or £300 this past winter, was generally available to those of state pension age and over.

DWP figures published in February showed there were some 235,000 Pension Credit applications in the 30 weeks since the Winter Fuel Payment change was announced, an 81% increase compared to the same period for the year before.

The DWP confirmed 117,800 new Pension Credit during this 30-week period last year. State pension payments increased 4.1% this April.

This has lifted the full new state pension from £221.20 a week to £230.25 a week, meaning the full amount is only £600 a year away from using up the personal allowance and becoming subject to income tax.

Benefits experts have warned this could lead to some people losing out on entitlement to Pension Credit. Rebecca Lamb, external relations manager at Money Wellness, warned: "Many people understandably assume that a small rise in their pension is a good thing.

"But if it pushes them just over the personal tax allowance, it won't just mean paying a bit of income tax - it could disqualify them from Pension Credit, which in turn opens the door to a much larger loss."

She said this could mean a huge drop in income for some claimants: "Pension Credit acts as a gateway to a wide range of help: Housing Benefit, Council Tax Reduction, free NHS dental and eye care, the Warm Home Discount, Cold Weather Payments, and even the free TV licence for over-75s.

"In total, someone could end up losing more than £8,000 a year in support, all because their pension creeps just above the threshold.

"This could leave some of the most financially vulnerable people in society worse off, not better off, as a result of a modest increase in income."