UK Government to Ban Firms Charging Pensioners for Benefit Claims

Ministers are planning to prohibit "rogue" firms from charging pensioners fees to help them claim disability benefits, following a substantial increase in such claims managed by these companies. Work and Pensions Secretary Pat McFadden has developed proposals to curb firms that bill pensioners as much as £1,300 annually to assist with Attendance Allowance applications.

This initiative comes in response to a fivefold rise in benefit applications processed through claims management firms. Mr. McFadden stated that some elderly individuals, in their eighties, have experienced distress due to their interactions with these firms, which sometimes demand upfront payments or ongoing fees exceeding 20 percent of the benefit amount. In certain instances, personal details have been submitted to support benefit claims without the individuals' knowledge, which Mr. McFadden described as potentially amounting to fraud in severe cases.

"It is unacceptable that rogue companies are charging people significant fees for support they are entitled to," Mr. McFadden wrote. "Our actions will hold these companies to account and make sure people know that free, independent support is already available through trusted organisations. The welfare state exists to support those in need, including vulnerable pensioners. It's not there for private companies to profit from."

Under a proposed new code of conduct, these firms will be prevented from charging fees for submitting benefit claims on behalf of others. While claims management firms have long operated within the benefits system, government sources indicated that ministers have become increasingly concerned about companies deliberately targeting vulnerable individuals, particularly the elderly, for financial gain. The number of Attendance Allowance applications submitted via claims management firms has increased significantly over the past year, rising from hundreds to thousands.

Attendance Allowance is a benefit provided to pensioners who require assistance with personal care due to an illness or disability. The benefit offers weekly rates of £76.70 for those needing frequent daytime help, and £114.60 for those requiring assistance both day and night.

Government officials have indicated that if these firms do not adhere to the new code of conduct, ministers are prepared to enact legal changes to ban them from charging fees for claim submissions. Additionally, the government is funding an advertising campaign to inform the public about the availability of free benefits advice services.