Up to 1.2 million families who were entitled to receive pension credit did not claim the benefit in the financial year 2017/18, according to Department for Work and Pensions figures.
Up to £2.5 billion of available pension credit – a means-tested benefit for people who have reached state pension age which tops up their income – went unclaimed.
On average, this amounted to around £2,000 per year for each family entitled to the benefit who did not claim it.
Across Britain, around six in 10 (61%) of those entitled to pension credit did claim the benefit.
The take-up rate in 2017/18 was the same as in 2016/17.
Take-up of pension credit by those aged under 75 continued to be higher than those aged 75 or over.
Age UK said pension credit is often known as the “gateway” pensioner benefit, not only topping up incomes but helping people access other benefits to help with the cost of living.
From June 2020, the current scheme of all over-75s receiving free TV licences will be restricted to those who claim pension credit.
Caroline Abrahams, charity director at Age UK, said: “It’s very clear from today’s figures that much more needs to be done to make sure the poorest pensioners get the financial help they’re entitled to.”