Research and analysis

Executive summary

Updated 24 October 2024

Background 

Pension Credit (PC) provides pensioner households with extra money to help with living costs if they are over State Pension age (SPa) and on a low income. The latest take-up estimates indicate that in the financial year ending 2022, 63% of those entitled to PC received the benefit^{[footnote 1]}. This means that there are a significant number of pensioner households that are currently not claiming the benefit they could be entitled to.  

While these estimates provide a useful starting point for thinking about take-up, it remains difficult to accurately identify PC entitled non-recipients (ENRs). Results from the Family Resources Survey (FRS) can, for example, reveal savings and income data at an aggregate level, but cannot provide data at the individual household level. Without this data, we are unable to contact all potential PC ENRs and cannot target take-up activity effectively.  

To ensure that pensioners receive the support they are entitled to, the Department for Work and Pensions (DWP) ran a test and learn exercise, exploring a new way of using data more effectively. The project involved using Housing Benefit (HB) data to identify a subset of all known PC ENRs^{[footnote 2]} and sending them letters, inviting them to make a claim.  

Research aims 

This research was conducted with the aims of: 

• identifying whether DWP could use administrative HB data to accurately identify PC ENRs
• to investigate the effectiveness of sending an invitation to claim letter to a sample of those identified from HB data as being entitled to PC, but not receiving the benefit 

Research design 

HB administrative data was used to identify approximately 144,500 pensioner households who were potentially entitled to PC but not receiving it. A treatment group of 2,409 pensioner households within 10 Local Authority (LA) areas were sent a letter in July 2023, advising them of their potential eligibility and inviting them to make a claim. They also received a reminder letter in September 2023. The remaining approximately 142,000 pensioner households outside of the 10 LA areas, did not receive a letter and were treated as a control group for comparative purposes. 

Administrative data was used to track PC claims made subsequently to the invitation to claim letter. Early claims data provided essential learning and allowed us to improve the criteria used to identify ENRs with HB data. Follow up interviews were conducted with a number of pensioner households from the treatment group. Interviews covered the participant’s claims history; reactions and understanding of the letter, and reasons to claim or not to claim. 

Key findings 

• A significant outcome of this test and learn exercise is that we have been able to improve the ENR selection criteria. Data identified during the test and learn exercise allowed us to refine the criteria to more accurately identify potential ENRs. This criteria was applied to the original treatment group, producing a smaller sub-group (the refined group) that we can be more confident are ENRs. The results of the refined group are more indicative of the success of this exercise, however for completeness the results of the original group are also reported. 
• Applying the original criteria: 
  • 713 (29.6%) of the 2,409 households that were sent a letter made a PC claim during the almost 4-month period following the mailing of the letters 
  • DWP assessed the eligibility of these 713 claims and found that 267 (37.4%) were entitled to a mean average of just over £46 per week of PC 
  • this means that 11.1% of those that DWP wrote to made a successful PC claim, the comparative figure for the control group was 2.3%
• Applying the refined criteria reduced the treatment group to 708.  
  • Of these, 259 (36.6%) made a claim to PC in the almost 4-month period following the mailing of the letter.  
  • When assessed, 195 (75.3%) of these 259 claims were found to be entitled to a mean average of just under £51 per week of PC.  
  • This means that when applying the refined criteria, 27.5% of those DWP wrote to in the refined criteria subsequently made a successful PC claim.  
  • When applying the refined criteria to the control group also, the comparative figure was only 4.6%. 
  • These findings suggest that sending an ‘Invitation to Claim’ PC letter to ENRs significantly increased the likelihood of successfully making a claim, with those in the refined treatment group being 6 times more likely than those in the refined control group to make a successful PC claim. Receipt of the letter also had a noticeable impact on those who were entitled to smaller amounts of PC, significantly increasing their likelihood of making a successful claim.  

These findings are illustrated in the figure below^{[footnote 3]}:

• 19 qualitative telephone interviews were conducted with individuals who received the letter.  
  • 15 participants said they made a claim after receiving the invitation to claim letter. Of those who were asked, all said that the letter had influenced their decision to claim. Secondary motivations to make a claim included believing it was ‘worth a try’ (worth making a claim to see if they were entitled) and struggling with the cost of living. 
  • Generally understanding of the letter was good, with most participants interpreting the invitation to claim letter as meaning they were potentially entitled to PC and encouraging them to make a claim. 
• Overall, feedback on the invitation to claim letter was positive. Even those who claimed and were found to be ineligible appreciated DWP taking a lead in encouraging ENRs to claim money they are potentially entitled to. 
• Assuming the results from the refined group were replicated to apply to the whole of the estimated population sample, it could result in a further: 
  • 32,000 (28%) to 41,000 (35%) making a successful claim to PC
  • 1 to 2 percentage point increase in PC take-up.

1. Income-related benefits: estimates of take-up: financial year ending 2022 - GOV.UK ↩

2. Around one in six PC ENRs claim HB ↩

3. There were 267 households from the original treatment group that made a successful claim to PC; this is higher than the 195 successful claims in the refined treatment group. These 72 households were not included in the refined treatment group. This is because based on the refined criteria, they were not entitled to PC at the start of the exercise. In the period following the letters these households had a change of circumstance, meaning that when they made a claim for PC they were subsequently entitled. These 72 successful claims have been counted towards the original treatment group. This is explained further in the quantitative results section of the report. ↩