A new report by Policy in Practice estimates that unclaimed income-related benefits and social tariffs is now £18.7bn a year. In a guest blog, Tylor-Maria Johnson explores the causes of low take-up and how we can change things
In 2021, Your Housing Group helped an elderly gentleman who recently lost his wife. He was only receiving his state pension and not aware of what support was available to him.
A Money Advice Triage Officer used Policy in Practice’s Better Off Calculator to assess his benefits eligibility.
Together they discovered that he was eligible for Housing Benefit, Council Tax Support and Pension Credit. He successfully applied for these benefits and saw his annual income increase by around £1,320.
He said “I really wouldn’t have had a clue without your help. I am really grateful for everything you have done for me and I am over the moon.”
Millions of other people are in a similar position. Policy in Practice estimates that one in four families on low incomes won’t have enough money for basic household costs.
Boosting a household’s income through the benefit system is a simple way to support families through the cost-of-living crisis.
Who’s not claiming what?
Top five unclaimed benefits
| Unclaimed benefits by number of households | Unclaimed benefits by annual value |
| Water social tariffs missed by 5.7 million | Universal Credit at £7.57 billion |
| Broadband social tariffs missed by 5.2 million | Council Tax Support at £2.87 billion |
| Council Tax Support missed by 2.7 million | Carer’s Allowance at £2 billion |
| Warm Homes Discount missed by 2 million | Pension Credit at £1.75 billion |
| Universal Credit missed by 1.2 million | Child Benefit at £1.13 billion |
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 is unclaimed by 1.2 million households.
Council Tax Support is the most underclaimed benefit in England, with 2.7 million households missing out on £2.8 billion of support.
Support for broadband and utility bills is also significantly underclaimed. At least five million families could access lower cost tariffs with broadband providers.
Four reasons why benefits are unclaimed
Benefits go unclaimed because of an interaction of factors. These include:
- Administrative complexity: The complexity of multiple application mechanisms, administering organisations, eligibility criteria and conditionality make it challenging for households to access support. Dealing with this complexity can make the stress of not having enough money even worse.
- A lack of awareness: Many people are unaware that they can claim support given their circumstances or income. Some households may be unaware that there are separate application processes for local support schemes and social tariffs.
- Increasing fragmentation of support: Inadequacy of means-tested benefits drives a growing patchwork 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 people from engaging with the benefits system. Similarly, deliberate barriers in the benefits system, like the threat of sanctions and arduous disability assessments, make access to benefits difficult.
The power of data
Our work with frontline advisors in the advice sector, local government, financial services, and utilities sectors continues to show us that data can help people overcome the difficulties in accessing benefits. Benefits calculators and data analytics can explain complex benefits policies and give people the advice they need to grow their financial strength.
“A client was referred to us for some benefits advice. Our Help to Claim team quickly realised that this person was very vulnerable as he was losing his sight and wasn’t able to use a computer any more. He had no food nor utilities and only 60p in his pocket. We needed to get some money to him urgently.
A claim was made that day for Universal Credit. We arranged for a food parcel to be delivered, provided a fuel voucher and applied for Personal Independence Payment. We continued to help until all his benefits were in payment. The gentleman saw his income increase by £930. He told us how much he appreciated our help by saying he was overwhelmed with the help he had received.”
Julie Murphy, Technical Quality Welfare, Research and Campaigns Lead, Citizens Advice Wirral
Act now to boost benefit take-up
We have continued to ask the government to address the sufficiency of main social security benefits, reduce the administrative complexity of benefits application, and to reduce negative messaging around benefits. But there are simple steps people can take to help boost benefits take-up as well.
Two actions for councils and other organisations:
- Identify residents in need using data analytics and contact them on the benefits they are missing out on. Policy in Practice runs the Low Income Family Tracker (LIFT) that combines administrative datasets to identify people in danger of financial crisis, and help them maximise income by taking up the benefits they are eligible for.
For instance, our ongoing data-led Pension Credit using LIFT encourages more than 8,500 eligible pensioner households across London 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 are unaware of their eligibility for benefits.
Two actions for families:
- Do a benefits check: You shouldn’t need to be a policy expert to understand what the changes to the welfare system mean for you. A reputable benefits calculator can tell you if you’re missing out on £19 billion of unclaimed benefits.
Policy in Practice runs the Better Off Calculator used by hundreds of Citizens Advice organisations and councils. It gives the most fast and accurate estimates of national and local benefits with a budgeting suite to help you see where savings can be made. - Claim all you are eligible for even if it is a small amount: Universal Credit, Pension Credit and other means-tested benefits are a gateway to claiming other benefits like the Cost of Living Support payments.
Deven Ghelani, Director of Policy in Practice, says: “We urge everyone to do a benefits check either for themselves or a loved one. Last year over two million people used our Better Off Calculator and it put around £720 million into people’s pockets. This works out at an average of £1,650 a year. For people who weren’t already claiming means-tested benefits their annual income rose by over £4,000.”
Tylor-Maria Johnson is Senior Policy and Data Analyst at Policy in Practice. Policy in Practice is a social policy and analytics company that empowers people to reduce financial vulnerability. It runs one of the three free benefits calculators on GOV.UK, see betteroffcalculator.co.uk
Image: Andrea Piacquadio / Pexels
