How families miss out on £20bn in unclaimed tax perks and benefits

How families miss out on £20bn in unclaimed tax perks and benefits 2
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More than £20 billion of support cash is going begging every year because households are unaware of their entitlements to tax perks and benefits.

As the cost-of-living crisis reaches boiling point — with energy bills and food costs soaring — Money Mail today reveals how families can claw back some cash.

Government figures show that a wide range of benefits, including marriage allowance, child benefit and pension credit, all have chronically low take- up rates.

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How families miss out on £20bn in unclaimed tax perks and benefits 3

Unclaimed cash: Government figures show that a wide range of benefits, including marriage allowance, child benefit and pension credit, all have chronically low take- up rates

It means HMRC is left sitting on mountains of unclaimed money, while families continue to struggle with rising costs.

The shocking toll of unclaimed money includes more than £15 billion in benefits, according to advice site EntitledTo.co.uk. Now ministers are facing calls to better promote the benefits and perks which could prove vital to families.

Liberal Democrat work and pensions spokeswoman Wendy Chamberlain says: ‘Millions of families are grappling with the cost-of-living crisis, so it’s shocking to find out that £20 billion of benefit is going unclaimed.

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‘The very least ministers should be doing is ensuring people know what support they are able to access and how to claim it, so no one falls through the cracks.’

Among benefits critically under-claimed is pension credit, which gives money to those over state pension age and on a low income.

In 2020, some 850,000 eligible households missed out on £1.7 billion — around £1,900 each.

Helen Morrissey, senior pensions and retirement analyst at broker Hargreaves Lansdown, says: ‘These enormous sums could really boost people’s income in retirement, and it is vitally important that those who think they may be entitled to support check.’

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Morgan Vine, head of policy at charity Independent Age, adds: ‘These figures clearly show that not enough has been done.’

Another benefit going unused is the tax-free childcare scheme.

Earlier this year, Money Mail revealed how less than a quarter of those eligible benefited from the help, based on official figures from March 2021.

Here, Money Mail talks you through the free money you may have a claim to . . .

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Extra pension cash: Unclaimed: £1.7 billion

First step: Signing up to pension credit acts as a gateway for help with council tax, NHS prescriptions, glasses and a free TV licence

First step: Signing up to pension credit acts as a gateway for help with council tax, NHS prescriptions, glasses and a free TV licence

You can claim pension credit if you are above state pension age and on a low income, with few savings. 

If your weekly income is below £177.10 — or £270.30 with a partner — pension credit will top it up to that amount. 

Signing up acts as a gateway for help with council tax, NHS prescriptions, glasses and a free TV licence.

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The Department for Work and Pensions this week launched a campaign to increase awareness and uptake. 

Pensions minister Guy Opperman says: ‘We recognise the challenges some pensioners will be facing with the cost of living, which is why promoting pension credit is a priority.’

How to claim: Call 0800 991234 or go to gov.uk/pension-credit/ how-to-claim.

Income boost: Unclaimed: £9.53 billion

Universal Credit is a monthly payment made to those who are unemployed or on a low income.

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The Government no longer releases official statistics of how many eligible people are failing to claim. 

But analysts at benefits calculator site Entitled To estimate that £9.53 billion is going unclaimed every year.

You may be eligible if you’re on a low income. You could be working (including self-employed or part-time) or be out-of-work. 

To claim, you must live in the UK, be over 18 (some exceptions apply), be under state pension age and have less than £16,000 in savings.

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How to claim: Ring 0800 328 5644 or visit gov.uk/universal-credit/ how-to-claim.

Marriage tax perk: Unclaimed: £509 million

Married couples are entitled to a tax break worth £252 a year if one of them earns below the personal allowance. 

HMRC estimates 4.2 million couples are eligible for the perk — but figures suggest take-up is around half that, at two million. 

Wedding gift: Married couples are entitled to a tax-break worth £252 a year if one of them earns below the personal allowance

Wedding gift: Married couples are entitled to a tax-break worth £252 a year if one of them earns below the personal allowance

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The good news is that anyone who has missed out on the payments can backdate their claim to include any tax year since April 5, 2017.

You are eligible if you are married and do not pay income tax or earn less than the £12,570 personal allowance. Your partner must pay income tax at the basic rate.

How to claim: Visit gov.uk/apply-marriage-allowance or include as part of your self- assessment tax return.

Council tax cut: Unclaimed: £2.7 billion

You can reduce your council tax bill by up to 100 pc if you are on a low income or claim benefits. Entitled To says 2.7 million eligible families failed to claim in the most up-to-date figures.

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Eligibility depends on where you live (each council has its own scheme) and your income, number of children, benefits and residency status.

You can apply if you own your home, rent and are unemployed or working.

How to claim: Apply via your local council.

Child cash: Unclaimed: £944 million

Child benefit gives parents earning less than £50,000 £21.15 a week for a first child, and £14 a week each for any subsequent children.

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Anybody responsible for bringing up a child under 16 (or 20 if they are in approved education or training) can claim £21.15 a week for their first child - or £14 a week for any child after that

Anybody responsible for bringing up a child under 16 (or 20 if they are in approved education or training) can claim £21.15 a week for their first child – or £14 a week for any child after that

Anyone responsible for bringing up a child under 16 (or 20 if they are in approved education or training) can claim. 

Eligibility rules differ if your child goes into hospital or care, or lives with someone else.

How to claim: Call the Government’s Child Benefit helpline on 0300 200 3100 or log on to gov. uk/child-benefit/ how-to-claim.

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Care relief: Unclaimed: £2.8 billion

Tax-free childcare tops up 20p to every 80p parents spend on nannies and nurseries, giving a maximum of £2,000 a year per child, or £4,000 for a disabled child.

The perk is available for 1.7 million children under the age of 11 but fewer than 300,000 parents use the scheme, according to HMRC figures from last year.

To qualify, both parents must be in work, each earning at least £142 a week but no more than £100,000 a year.

How to claim: Call HMRC on 0300 123 4097 or visit gov.uk/ tax-free-childcare.

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Grown-up funds: Unclaimed: £2.2 billion

Children born between September 1, 2002, and January 2, 2011, were automatically set up with a child trust fund.

Dormant accounts: Children born between September 1, 2002 and January 2, 2011 were automatically set up with a child trust fund

Dormant accounts: Children born between September 1, 2002 and January 2, 2011 were automatically set up with a child trust fund

The first wave of funds started maturing in September 2020 but HMRC says many have still not been claimed.

There are estimated to be as many as a million lost accounts, each containing £2,200.

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To track one down, visit gov. uk/child-trust-funds/find-a-child- trust-fund

Help with housing: Unclaimed: £1.1 billion

If you rent over the state pension age and are on a low income, you could receive housing benefit worth up to £4,000 a year.

Entitled To estimates £880 million went unclaimed in 2019/20, but Hargreaves Lansdown puts the figure at £1.1 billion.

You may be eligible if you pay rent, are on a low income or are claiming benefits, have savings or investments amounting to less than £16,000 and are over the state pension age.

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Call the Government’s pension service on 0800 99 1234 or visit gov.uk/housing-benefit/ how-to-claim.

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