Millions of UK households are collectively missing out on at least £19bn a year in unclaimed welfare benefits, according to new estimates from the consultancy Policy in Practice. The study highlights that lower-income families could be forgoing as much as £4,000 annually, at a time when many are turning to food banks or accumulating debt amid rising living costs.
The analysis identifies several factors contributing to the high level of unclaimed support, including the complexity of the benefits system, lack of public awareness, and the stigma associated with claiming benefits. It estimates that 1.3m households eligible for universal credit do not claim it, resulting in £7.5bn going unclaimed each year. Nearly 3m eligible families miss out on council tax support (£2.9bn), while 5m households forgo nearly £2bn in support for water, energy and broadband bills.
Deven Ghelani, director of Policy in Practice, described the situation as “shocking,” particularly during a cost of living crisis. He noted that missing out on eligible benefits could be the difference between households staying afloat or struggling. Benefits advisers reported that even small additional payments of £10 to £20 a week can have a transformative effect, enabling families to afford food, heating, and other essentials.
The study found that pensioners are particularly reluctant to claim benefits due to a perceived shame associated with “handouts.” An estimated 850,000 pensioner households fail to claim £1.8bn annually in pension credit, which is designed to support low-income retirees. In one case, advisers helped a Kent pensioner couple secure an extra £222 a week in pension credit, amounting to £11,500 a year.
The government has been urged to promote positive messaging about benefits to reduce stigma. The study also calls for simplification of the social security system, which currently requires multiple applications across different organisations. Daphne Hall of the National Association of Welfare Rights Advisers emphasised that claimants need high levels of confidence and persistence to navigate the system, which can place administrative and psychological barriers in the way of those in need.
