New analysis by Policy in Practice finds that the total amount of unclaimed income-related benefits and social tariffs is now £18.7 billion a year. We estimate that £7.5 billion of Universal Credit is unclaimed by 1.2 million eligible households and £2.9 billion of Council Tax Support is unclaimed by over 2.7 million eligible households each year.

  • £7.5 billion of Universal Credit goes unclaimed by 1.2 million eligible households. Caseload take up varies between 70% and 90% for national means tested benefits
  • Take up is lower for locally administered benefits. Council Tax Support is the most underclaimed, with 2.7 million people missing out on £2.8 billion of support
  • Social tariffs are also significantly underclaimed. Broadband social tariffs have the lowest take up, with 97% of eligible households missing out on the tariffs. People on means tested benefits should check for eligibility with their utility providers.

Read the full report: Missing out: £19 billion of support goes unclaimed every year

Millions of households need extra financial support to stay afloat

In 2021 Your Housing Group helped an elderly gentleman who had recently lost his wife. He was only receiving his State Pension and was not in receipt of any other benefit. At the time, he was not aware of what additional support was available to him.

Using Policy in Practice’s Better Off Calculator, Laura Beetham, Money Advice Triage Officer, assessed his eligibility for benefits.

Together, they discovered that he wasn’t receiving Housing Benefit, Council Tax Support and Pension Credit that he was eligible for. He went on to successfully apply for each of these benefits and saw his annual income increase by around £1,320.

His testimony speaks for itself when 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.

Laura Beetham, Money Advice Triage Officer, Your Housing Group

There are many other people in a similar position. We estimate that one in four low-income households will not have enough money for basic household costs.

Maximising income through the benefit system is a simple way to support households through the cost of living crisis and improve lives.

New analysis reveals the level of unclaimed benefits each year

Policy in Practice estimates the value of unclaimed benefits and the number of households that are missing out. The methodology for our calculations is available in the full report.

£19bn estimated unclaimed value by benefit, April 2023

Universal Credit and Council Tax Support are the most underclaimed benefits each year

Universal Credit

We estimate that £7.5 billion of Universal Credit goes unclaimed by 1.2 million eligible households. This is the largest pot of money left unclaimed out of any of the benefits.

Accessing this support can be life changing. But many families, especially those in work, do not apply because they believe that Universal Credit only covers people who are out of work or on very low incomes.

Our previous publication on Universal Credit highlighted that up to 300,000 higher-rate taxpayers may be eligible for Universal Credit. For instance, a household earning a maximum annual gross income of well over £100,000 with rental and childcare costs could be eligible for Universal Credit.

Council Tax Support

We estimate that £2.9 billion of Council Tax Support is left on the table by over 2.7 million eligible households.

Many households may not claim Council Tax Support because they do not know that this support exists. Some local authorities may not widely publicise their scheme.

There is also a concerning drop off in take-up of Council Tax Support as households migrate to Universal Credit from legacy benefits. A household on Universal credit must trigger a separate claim for Council Tax Support. This had previously been assessed automatically alongside claims for Housing Benefit.

This two step process creates friction in the journey to claiming Council Tax Support and may hinder households from accessing this support.

Four reasons why benefits are going unclaimed

Benefits go unclaimed because of a complex interaction of factors. These include:

  1. Administrative complexity

    The sheer complexity of multiple application mechanisms, administering organisations, eligibility criteria and conditionality create a barrier for many people who are trying to navigate the system and access support. Dealing with this complexity ratchets up pressure on people in poverty, exacerbating the stress that goes hand-in-hand with not having enough money

  2. A lack of awareness

    Many claimants are simply unaware that they can claim support given their circumstances or income. This research was partly inspired by recent analysis on benefit entitlements for clients in the financial services and utilities sectors. That work resulted in first time claimants gaining over £4,000 a year and existing claimants typically gaining over £1,500 a year

  3. Increasing fragmentation of support

    The inadequacy of means-tested benefits is driving a growing patchwork of discretionary and other support schemes. Help generally goes to those who already know about the schemes and can navigate often complicated application processes, rather than those most in need. Also, local funding drives geographical differences in provision. This creates postcode lotteries for available support, and unequal conditions to access it

  4. Stigma

    Negative perceptions around claiming benefits may discourage eligible people from engaging in the benefit system. A related factor behind the non-take up of benefits is the deliberate barriers in the system that act as gatekeepers to access, such as the threat of sanctions, and in-work search conditionality. Whilst these measures are intended to ensure people do not receive what they are not eligible for, they can also deter eligible households from claiming benefits altogether

How to boost benefit take-up and reduce the £19 billion of unclaimed benefits

People need to be protected from the rising cost of living. We have recommendations for how policymakers, local authorities and third party organisations, and households can help to reduce the £19 billion of benefits that go unclaimed each year.

Three actions for policymakers

  1. 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
  2. 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
  3. 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

  1. Identify residents in need using data analytics and contact them on the benefits they are missing out on. Leading councils use our Low Income Family Tracker analytics platform to launch benefits take up campaigns. For instance, our ongoing data-led Pension Credit across London will encourage 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
  2. Third party organisations and firms should also check for eligibility on behalf of their customers. Many households do not know that they are eligible for benefits. Our work in the utilities and finance sectors continues to find that many more customers are eligible for benefits

One action for families

  1. Check to see if they are missing out on any of the £19 billion of unclaimed benefits using a free benefits calculator as shown on GOV.UK.

Further information

Read the full report and our methodology: Missing out: £19 billion of support goes unclaimed every year

, ,

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

Register for an upcoming webinar

TitleDateStart TimeDurationRegister
Reducing barriers to work using data led campaigns In September 2023 the UK experienced an economic inactivity rate of 21.3% and an estimated unemployment rate of 4.3%, both of which have increased compared to previous data. Economic inactivity has surpassed pre-pandemic levels, prompting government efforts to integrate this group into the workforce.

Historically, policies under Universal Credit and legacy benefits emphasised pushing people into employment through conditionality and short term measures. Today, both major political parties are exploring ways to facilitate return to work and eliminate barriers to employment. However, the government is also extending conditionality and adopting a tougher stance on sanctions for a broader range of people.

Haringey is home to a young, ethnically diverse population. In June 2023, almost one fifth of those between 16 to 65 were on Universal Credit. Nearly 7% of residents over 16 were claiming unemployment related benefits, a figure above the London average of 4.7% and the 3rd highest rate of all UK councils

Haringey Council wanted to find ways to overcome barriers to employment for young people and families with children and has used data to achieve success with its employment support programmes.

Join this webinar to learn:

- The new carrot and stick policy changes designed to break down barriers to work and reduce economic inactivity
- What Haringey Council did to increase take up of free childcare for two year olds to 70%
- How Haringey Council successfully helped 95 NEETs on their employment journey

With guest speakers from Haringey Council
29/11/202310:30 GMT1.3 hours
Policy review of 2023 and what 2024 may hold Join our last webinar of 2023 to hear our policy analysts review 2023's policy changes and big issues, from the ongoing cost of living and energy crises to the funding of local government and the Autumn Statement.

We will highlight our policy findings from the year including our work that revealed that millions of households across the UK are missing out on £19 billion of support each year.

We'll look at the role that data is playing in helping leading organisations to tackle these issues.

Through case studies of different types of households we'll look at what the changes mean for families now, and what 2024 has in store.

Along the way we'll share the positive impact that organisations we work with ​are having, and give practical solutions that others can adopt.
6/12/202310:30 GMT1.3 hours
How the debt sector is connecting people to support31/1/202410:30 GMT1.3 hours
Skip to content
%d bloggers like this: