DWP Rejects Nearly 40% of Pension Credit Applications as Claims Plummet
New data from the Department for Work and Pensions (DWP) has exposed a sharp decline in Pension Credit claims, with a worrying 39% of state pensioners being denied payments under the £11,800 annual income rule. Between February 24, 2025, and February 22, 2026, the DWP recorded a substantial 36% decrease in applications, processing 242,440 claims while receiving only 209,735 new submissions.
Approval Rates Rise but Thousands Still Miss Out
Despite the overall drop in claims, the approval rate for Pension Credit has improved significantly, rising from 53% to 61% over the same period. However, this positive shift means that 39% of retirees who come forward to claim are still being refused financial support. Rachel Vahey, head of public policy at AJ Bell, commented on the trend, noting that a larger proportion of claims are now being awarded.
"This indicates that more pensioners who believe they have a strong case are submitting claims, unlike the surge of 'last chance' claims seen in autumn 2024," Vahey explained. "Almost 100,000 claims were still not awarded in the year to February 22, 2026, meaning a large number of those submitting claims may be unaware they don't qualify."
Understanding the Pension Credit Eligibility Threshold
Pension Credit serves as a crucial income top-up for low-income individuals over state pension age. To qualify, applicants must meet specific income thresholds:
- Single individuals with a weekly income below £227.10 (approximately £11,800 annually) are eligible.
- Couples with a weekly income under £346.60 (around £18,000 per year) also qualify.
These rates are scheduled to increase from April, offering potential relief for some retirees. The benefit effectively tops up income to the threshold level; for example, a single person earning £217 weekly would receive an additional £10 through Pension Credit, bringing their total to £227.10.
What Counts as Income for Pension Credit?
When assessing eligibility, the DWP considers various sources of income, including:
- State pension payments
- Private or workplace pensions
- Earnings from employment or self-employment
- Most social security benefits
The decline in claims and high denial rate highlight ongoing challenges for retirees navigating the benefits system, with many potentially missing out on vital financial support due to confusion over eligibility criteria or income calculations.
