As a London-based area controller, I really like to hear the words "Pan" or "Mayday" if you have a problem. Its use serves various purposes -
1. it is an unambiguous "attention getter" to ATC,
2. it SHOULD alert other pilots to the situation and allow free R/T time to deal with the situation,
3. other agencies who need to be informed easily understand the phraseology.
There has been an AIC out for some time now in the UK explaining the background behind the apparently pedantic questioning that we sometimes use when the "magic word" has not been used. Some years ago there was the suspicion that one or two airlines operating into the UK were using the presence of a "sick passenger" or "shortage of fuel" to shortcut the delay at busy times. Whether or not those allegations were well-founded, I cannot say, but the AIC clearly states that the UK does NOT recognise the words "Fuel Emergency" and will NOT give priority to any aircraft that will not declare a Pan or Mayday (or use words that leave no doubt that is what is intended). Similarly, the term "medical emergency" will not, by itself, lead to an accelerated landing slot.
Whilst this may sound harsh and uncaring, it has been decided that this is the best policy. So, if you have a real problem, use the words "Pan" or "Mayday" as appropriate - it can always be upgraded or downgraded if circumstances alter. Otherwise, expect the apparently time-wasting and pointless question "Do you wish to declare a Pan/Mayday?" or similar words.
Incidentally, we have to fill in a CA1261 occurence form each time either a Pan or Mayday is declared, but that is just NATS policy. As far as I understand things, the pilot will not have to fill out CAA paperwork merely for using the words - only if the occurence leading to their use requires such paperwork.
Fly safe.
NN