By Tylor-Maria Johnson and Alex Clegg, Senior Policy and Data Analysts at Policy in Practice
A new report by Policy in Practice estimates that the total amount of unclaimed income-related benefits and social tariffs is now £18.7 billion a year.
Millions of families need extra financial support to stay afloat
We estimate that one in four low-income households will not have enough money for basic household costs.
A simple way to support households through the cost of living crisis is by maximising income through the benefit system.
Designing an effective safety net requires an accurate understanding of the level of unclaimed benefits and an understanding of who is not claiming, and why.
Who’s not claiming what?
Universal Credit and Council Tax Support are the most underclaimed benefits
National benefits administered by the Department for Work and Pensions (DWP) make up the largest share of unclaimed benefits.
Approximately £7.5 billion of Universal Credit goes unclaimed by 1.2 million eligible households.
Council tax support is the most underclaimed benefit in England, with 2.7 million people missing out on around £2.8 billion of support.
Support for broadband and utility bills is also significantly underclaimed.
At least five million families could access lower costs tariffs with their water, broadband and energy providers.
Four reasons why benefits are unclaimed
Benefits go unclaimed because of a complex interaction of factors.
These include:
- Administrative complexity: The sheer complexity of multiple application mechanisms, administering organisations, eligibility criteria and conditionality make it challenging for households to access support.
- Lack of awareness: Many claimants are simply unaware that they can claim support given their circumstances or income.
- Increasingly fragmented support: Inadequacy of means-tested benefits drives a growing pathwork of local discretionary support schemes. This creates postcode lotteries for available support, and unequal conditions to access it.
- Stigma: Negative perceptions around claiming benefits may discourage eligible people from engaging with the benefits system.
How to boost benefit take up and close the £19 billion unclaimed benefits gap
Three actions for policymakers
- Address the insufficiency of main social security benefits: Inadequate benefit levels have a hand in growing the complex web support. New support schemes often fill the gaps in the main system. It is crucial that benefits cover the basic needs of a household.
- Reduce complexity and increase awareness of local and national benefits: The DWP should be made responsible for increasing take-up of support. Data sharing can streamline access to support and raise awareness of benefits at all points of contact with the household.
- Change the messaging around benefits: Government messaging is critical to ensuring that all those that are eligible access support. We urge the government to adopt a supportive approach towards claimants by lessening conditionality.
Two actions for local authorities and other organisations
- Identify residents in need using data analytics and contact them on the benefits they are missing out on. Leading councils use their data and our Low Income Family Tracker analytics platform to launch benefits take up campaigns. Our ongoing data-led Pension Credit across London encourages over 8,500 eligible pensioner households to take up Pension Credit worth £3,700 per year. This campaign will have a return on investment of £200 for every £1.
- Check eligibility: Organisations should check eligibility on behalf of their customers. Our work in the utilities and finance sectors continues to find many customers who are unaware they’re eligible for benefits.
One action for families
- Do a benefits check: Check to see if you’re missing out on £19 billion of unclaimed benefits using a free benefits calculator on GOV.UK.
Policy in Practice is a social policy and analytics company that empowers people to build their financial strength. It runs a free benefits calculator. You can also use Turn2Us’s benefits calculator or grants search.
