Jessica O'ConnorLower-income retired households are receiving significantly less in cash benefits than their better-off counterparts, according to analysis from retirement specialist Just Group.
The company reviewed newly published ONS data for 2023/24, which splits retired households into five income quintiles.
The lowest-income group received £11,327 a year in direct cash benefits, including the State Pension –£5,994 less than the top income group, whose gross annual income of £68,561 was nearly five times higher than the £15,003 recorded for the lowest quintile.
The starkest differences appeared between the bottom bracket and the middle-income groups: households in groups three and four received an extra £7,754 and £7,743 respectively in annual cash benefits and State Pension.
Weekly figures underline the disparity.
The highest-income group received £100 more per week in cash benefits and State Pension than the lowest.
For groups three and four, the gap widened to nearly £150 per week compared with the poorest retirees.
State Pension amounts also differed sharply. The bottom quintile received £8,859 a year, far below the £14,974 received by higher-income households.
Even Pension Credit, the benefit aimed specifically at low-income retirees, skewed higher up the income scale: the fourth income group received £454 a year on average, compared with £285 for the lowest-income households.
The findings coincide with Department for Work and Pensions estimates showing up to £2.5bn in Pension Credit goes unclaimed annually, with almost one million pensioner households missing out on an average of £2,600 a year.
Just Group’s own research found that 35% of adults aged 66 and over have never checked their eligibility for State Benefits.
Stephen Lowe, group communications director at Just Group, said: “These findings challenge the idea that the lowest income pensioner households get the most in State Benefits. In fact it is middle income pensioner households that receive the biggest amount.
“In some cases this is because people don’t realise what benefits they can claim or assume they won’t qualify, perhaps because they own their home. Others may get less because they haven’t built up enough qualifying years of National Insurance or have missed out on extra entitlements.
“While last week’s Autumn Budget confirmed a further State Pension uprating – worth an extra £575 next year for those on the full new State Pension – many older people still face a shortfall in meeting day-to-day costs.
“That’s why it’s still so important that pensioners check what additional support they may be eligible for. Even a small boost in income can make a meaningful difference.”
