It’s January. The local pub is doing a roaring trade in lime and soda but even that small outlay is too much for many of our abused bank accounts.
We need all the help we can get. And yet millions of Britons are failing to claim the benefits they are full entitled to designed to make specific, financially stressful situations a little easier.
The latest figures suggest 300,000 unemployed or very low earners, for example, are missing out on support worth at least £73 a week.
An investigation by the Resolution Foundation has found that those forgotten unemployed, or those on such low hours that they qualify for out-of-work support - described as ‘on the margins of our labour market’ – are mostly older people and younger men.
Individuals are able to earn up to £80 a week and still claim Jobseekers Allowance, or £116 a week under Universal Credit.
Members of this group are missing out on at least £73.10 a week (the current value of Jobseekers Allowance/standard Universal Credit allowance for those aged 25 and over). However, they could potentially be missing out on far more if they are also entitled to passported benefits such as maternity grants, energy discounts and free school meals.
David Finch, Senior Economic Analyst at the think tank, said: “Over the last twenty years, a growing number of unemployed people are not claiming unemployment benefits.
“Policy makers have generally been pretty relaxed about this gap, assuming that is largely due to people finding new work very quickly, or having other sources of financial support at home.”
The report calls on the government to do more to boost benefit take-up by those in need of support, arguing that the ongoing roll-out of Universal Credit provides an opportunity to refocus on those at the margins of the labour market.
But the benefits gap isn’t restricted to those looking for work.
This week, a Freedom of Information request to the Department for Work and Pensions has found that a scheme designed to help carers of disabled people build better state pension entitlement has failed to reach 97% of its target group.
Just 3,524 people claimed the national insurance credit in 2016/17, compared with a DWP estimate when the scheme was introduced that 160,000 carers could benefit.
Royal London, which submitted the request, and charity Carers UK are now calling for a more proactive approach from government to make sure that carers take up these valuable rights.
Royal London estimates that each year of credits would add £237 per year to a carer’s state pension, or over £4,700 over the course of a typical twenty year retirement. If, as estimated, more than 155,000 carers a year are missing out, that’s a total loss of more than £700m.
In 2010 the government introduced a new system of National Insurance credits to help bridge gaps in National Insurance records. It was targeted on carers who were spending at least 20 hours caring, affecting their ability to earn enough to pay National Insurance, but who were not entitled to the Carers Allowance for those doing 35 hours per week of caring, and which brings automatic credits for National Insurance.
“Caring for more than twenty hours per week has a big impact on someone’s ability to hold down a job and pay National Insurance Contributions,” says Emily Holzhausen OBE, Director of Policy and Public Affairs, Carers UK.
“The carer’s credit is a good scheme but it needs much more effective publicity. Caring often impacts negatively on health, wellbeing and ability to work and yet carers’ contribution to the economy is worth billions a year. They should not lose out financially in retirement as well.”
To qualify for the credit, a person aged under state pension age must be providing 20 hours per week or more of care for a disabled person who is receiving middle or highest rate disability living allowance, attendance allowance, constant attendance allowance, personal independence payment or armed forces independence payment.
Steve Webb, director of policy, Royal London said: ‘These schemes are introduced with the best of intentions, but they become no more than window-dressing if virtually nobody actually takes them up. Governments cannot simply hope that people find the information on official websites or rely on the occasional ministerial press release. It is time for proactive communications with those who are meant to benefit so that far more people get the help to which they are entitled’.
Meanwhile, pensioners are just one of the wide range of other groups also missing out.
Around 60% of eligible pensioner homeowners either aren’t receiving any benefit at all or are claiming but not receiving their full entitlement. The average loss for each household comes in at more than £1000 a year. Guarantee Pension Credit is a particularly under-claimed example – worth up to £8,286 a year for a single person and £12,352 for a couple
“One in three of those eligible for Guarantee Pension Credit failed to claim with an average loss of £3,431,” warned Stephen Lowe, group communications director at Just Group, which conducted the research.
“All of those not claiming this benefit were missing at least £1,000 a year and in one case the loss was £8,060 a year.
“Savings Pension Credit is actually the least likely benefit to be claimed with an average unclaimed value of £275 a year. Council Tax Reduction is another area of concern where fewer than half of those eligible are claiming and the average amount being lost is £491 a year.”
“The figures make clear that in a complex system people are struggling to get to grips with what State Benefits they are entitled to,” says Lowe.
“It strengthens the case for making free guidance the default option for all those heading into retirement – unless they specifically opt out – and that guidance should include information about entitlements to State help."
With 40% failing to claim, homeowners in particular may assume they aren’t entitled to significant support.
“The message from our State Benefit research continues to be that homeowners struggling for income should take steps to find out what they might be entitled to,” adds Lowe. “The government website is a mine of information or you can go to Citizens Advice and other charities who may be able to help.”