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Households missing out on £19bn in benefits every year

Rebecca Goodman
Written By:
Rebecca Goodman

At least £18.7 billion in benefits, including Universal Credit, is unclaimed every year by UK households, a new report claims.

Of that money, every year £7.5 billion is unclaimed in Universal Credit which could be paid out to around 1.2 million eligible households.

The most underclaimed benefit in England is council tax support and 2.7 million people miss out on £2.8 billion in support every year.

Yet millions of people are now desperate for extra money and support amid the cost-of-living crisis and soaring prices. In the last year, three million emergency food parcels were handed out by food banks, with more than a million going to children.

There are also at least five million households who could benefit from a social tariff to lower their water, broadband and energy bills, according to the report from the consultancy firm, Policy in Practice. Broadband social tariffs have the lowest take up, with 97% of eligible households missing out on them.

There are around 850,000 people who aren’t claiming pension credit, worth £1.7 billion, 500,000 people not claiming carers allowance, worth £1.9 billion collectively, and 765,000 not claiming child benefit, worth £1.1 billion.

Lack of awareness and administrative complexity

A lack of awareness, administrative complexity, and the fragmentation of support schemes are among issues that are to blame for benefits going unclaimed.

There are many barriers for people who are trying to access support, these include the eligibility criteria and the fact they need to make multiple applications to different organisations.

Many people are also unaware they could claim benefits and there is a stigma around doing so which stops people from accessing the support they need.

A postcode lottery exists for the support available because of the way the benefit system has been fragmented and there are unequal conditions to access it, the report said.

Solving the problem

Policy in Practice has put forward a series of recommendations for the Government to solve the problem of unclaimed benefits.

These include setting a national benefit rate which will cover the cost of all essential bills, raising awareness of the benefits available, and reducing the complexity of the system.

It also said the messaging around benefits needs to change so claiming this support is not seen negatively. It said Government messaging needs to be supportive of social security so those people who need it can access it.

Deven Ghelani, director of Policy in Practice, said: “It is shocking that £19 billion of benefits and support is unclaimed at any time, let alone during a cost-of-living crisis.

“Universal Credit simplifies access to support, but a growing patchwork of support has emerged to plug austerity driven gaps in social security. Government needs to act to raise awareness of all unclaimed benefits and people should check their eligibility using a free benefits calculator.”