The UK government is set to ban claims management companies from charging fees to pensioners for help with submitting benefits claims, following concerns over a sharp rise in exploitative practices targeting older people. The move comes amid a fivefold surge in applications for Attendance Allowance made through such firms over the past year.
Attendance Allowance is a benefit designed to assist pensioners who require help with personal care due to illness or disability. The weekly payment ranges from £76.70 to £114.60, depending on the level of care needed. However, some claims management companies have been charging fees as high as £1,300 per application, significantly reducing the financial support vulnerable individuals receive.
Work and Pensions Secretary Pat McFadden highlighted cases where pensioners, some in their eighties, have felt pressured into signing costly payment plans after repeated sales calls. In some instances, claimants reported discovering that information had been submitted on their behalf without their full knowledge, with allegations that details exaggerating care needs were included — actions that in serious cases could constitute fraud.
“There are instances where the customer, rather than the company, faces the risk of consequences,” McFadden said, emphasizing that no person seeking assistance due to illness, disability, or financial difficulty should be placed in such a position. He described the exploitation by some firms as “unacceptable” and pledged that government efforts would hold these companies accountable.
To address the issue, the government will introduce a new Code of Practice for the claims management sector, backed by potential legislation to enforce it. This code will prohibit firms from charging fees to submit benefits claims on behalf of others. Officials expressed concern that some companies have deliberately targeted vulnerable elderly people to profit from their welfare entitlements.
In conjunction with regulatory changes, a national awareness campaign will be launched to inform claimants about free support services available through organizations such as Citizens Advice and Independent Age. Advertisements will appear in major newspapers and be displayed in GP surgeries and pharmacies to increase public understanding.
Government sources stressed that many pensioners are unaware that these trusted charities offer free assistance with benefits claims, making them susceptible to costly and sometimes predatory commercial services.
The crackdown reflects broader efforts to ensure that the welfare system remains a source of support rather than a profit center for private firms. “The welfare state exists to support those in need, including vulnerable pensioners. It’s not there for private companies to profit from,” McFadden said.
Ministers indicated they are prepared to amend legislation to back the code of conduct if necessary, signaling a firm stance against what they characterize as “rogue” claims management operators inflating costs to some of the most vulnerable members of society.