Age Concern says that £1.4 billion in council tax credit goes unclaimed each year and has launched a campaign to provide claimants with more information and support.
It hopes the campaign will see pensioners gain an extra £100 million by next April after its research suggested 35 per cent of people are worried that an older friend or relative is missing out on vital money benefits.
Michelle Mitchell, the charity's head of public affairs, said that many pensioners still feel a "stigma" attached to making benefits claims and are often concerned that some of their money may be taken away.
"What we want to do is to urge people today - whether it is friends or family or whether it is you yourself - to claim your benefit. Get in touch with your local Age Concern," she told the Today programme.
"We are launching our campaign today to get £100 million into the pockets of pensioners and we will be able to give you a free benefits check-up and perhaps also visit our house or call you to get you through the forms and ensure you get what is rightfully yours."
She went on: "The government has made considerable progress since 1997 in lifting two million out of poverty, but 1.8 million pensioners remain in poverty today. We hear of many, many more who are struggling to make ends meet on a daily basis."
Ms Mitchell said the government should renew its benefits campaign and create automatic take-up of pensioner benefits.
In response to the report, a spokesperson for the Department for Work and Pensions (DWP) insisted that tackling pensioner poverty is the government's "first priority" and highlighted initiatives such as pension credit which have "helped to lift more than two million pensioners out of absolute poverty and a million out of relative poverty".
"Today, no pensioner should be living on less than £119 per week - compared to £69 per week ten years ago," the representative said.
"We welcome Age Concern's campaign and hope it will complement the work we are doing with local authorities to alert people to their entitlement and make the claim process as simple as possible."
But the Conservatives have accused the government of "leaving so many pensioners in this desperate position".
"The plain fact is that [chancellor] Gordon Brown's complex and intrusive pensioner
means testing is failing the most vulnerable," shadow work and pensions secretary Philip Hammond said.
"Many of the poorest pensioners are unsure of what they should be claiming and, as a result, don't receive the help they are due. This is unacceptable."
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