Missing out 2024: £23 billion of support is unclaimed each year

Policy in Practice estimates that the total amount of unclaimed income related benefits and social tariffs across Great Britain is now £22.7 billion a year. This represents a 21% increase on earlier estimates, driven by uprating and improved estimates which show more people are missing out.

The links between poverty, health, and public services are well established. Maximising income through the take up of benefits is essential to help both people on low incomes and public services cope in the face of rising living costs and increasing demand. Understanding levels of unclaimed benefits is also crucial to addressing unmet needs and structural gaps in the welfare system.

As more than 400,000 working age households migrate to Universal Credit in 2024, and as we approach a general election where an incoming government will face limited budgets and rising demand for public services, this report examines what we know about unclaimed benefits, and how we can maximise income locally, regionally, and nationally.

To estimate the levels of unclaimed support, we have used official figures provided by the government where available. Where data is not available, we have adopted a range of methodologies and used the latest available information to provide a robust estimate of unclaimed benefits.

The overall figure of unclaimed support excludes disability benefits and discretionary support, both of which require a further assessment. Including these elements pushes the true level of unclaimed support to over £30 billion.

Since we launched our Missing Out analysis in 2023, 270,000 households are better off by £260 million a year, as a direct result of our work with partners using the LIFT platform. For many, this means the difference between struggling to get by or not. Our work is also helping our local authority clients to reduce arrears by around £12 million each year.

Organisations that use our Better Off Calculator have helped over half a million people to claim nearly half a billion pounds a year. Every day around 10,000 people use the Better Off Calculator through our clients or via GOV.UK to check their eligibility for benefits. Many get direct access to support schemes with a single click through our Apply Once capabilities.

Meanwhile, we continue to call for greater transparency over claimed and unclaimed support levels across the spectrum of benefits available for working age and pension age households.

We also urge the government and its partners to improve the flow of data across the welfare system to further unlock the potential of administrative data and proactively deliver a more efficient, streamlined social security system.

In the first of our Missing Out reports we identified £18.7 billion in unclaimed means tested benefits.

Since then we have continued to work with government, housing providers, and utility companies to address unmet needs proactively.

In spite of this success, we find £4 billion in additional unclaimed benefits in 2024, bringing the total of unclaimed support to £23 billion a year.

Much of the £4 billion increase can be attributed to inflation linked uprating of benefits for working and pension age claimants and the unfreezing of Local Housing Allowance rates to the 30th percentile of local rents, the first such increase since 2020.

The rollout of Universal Credit also has an impact. This is because we have excluded legacy benefits from our estimates as they can no longer be claimed, so as more people become eligible for Universal Credit, the number of people missing out increases too.

The DWP’s own estimates show a fall in take up of Universal Credit as people are migrated across from legacy benefits. We have also seen lower take up estimates published by the DWP for Pension Credit and Housing Benefit for pensioners this year.

Whilst it is disappointing to see more support going unclaimed we welcome the DWP’s greater transparency on take up rates and look forward to seeing official estimates for the take up of Universal Credit next year.

We have improved our estimates for locally administered benefits by breaking down figures for working age and pension age households for council tax support, and taken into account family composition for Healthy Start and Free School Meals.

For social tariffs and support for utilities, the changes relate primarily to our revised estimates for other means tested support as this is typically the core qualifying criteria, and some refinements to our approach. Social tariff take up rates remain the lowest of all of the benefits included in our analysis, with no official updates to estimates from the regulators.

We know the administrative burden of applying for multiple low value benefits while negotiating the applications for core social security can be a challenge for customers, and we are working actively with the sector to improve data sharing.

There are some improvements: Healthy Start shows that it is possible to narrow the unclaimed benefit gap. Concerted efforts through local agencies to increase Healthy Start take up have paid off, improving mental, physical, and financial health for young families. This shows that action to improve take up rates can make a real difference to people’s lives.

Living with financial stress is impacting our communities, and tackling the gap will improve outcomes for people across the UK by improving education and health outcomes for children, widening social participation, and reducing the burden on the national health and social care system

Since the launch of Missing Out 2023 one of the most common responses to unclaimed benefit figures is to ask if we as a country can afford the additional spending needed to close the gap.

We argue that support from the social security system is a right, and low income households cannot afford to miss out on the support they are eligible for. We argue that the system is failing to provide support to people entitled to it.

We can’t afford not to close the unclaimed support gap.