Neil Hugh, Head of Workplace Proposition at Standard Life, part of Phoenix Group, comments: “On 10th April, most state benefits including Universal Credit and Pension Credit will rise by 10.1% after the government’s announcement last Autumn that they would rise with inflation. While this will be a welcome boost to some of the UK’s most vulnerable households, it’s estimated that more than £15bn of government benefits go unclaimed each year1. With recent Standard Life research finding less than half of people currently feel positive about their financial situation, it’s more important than ever that people know what sort of support is available to them2. Many are unaware of the different types of benefits out there so don’t even think to check their eligibility. Others are put off by the thought of dealing with the government claim process because they think it will take too long or because they don’t think they’ll be accepted. And many people don’t realise that if you get accepted for some benefits, it can mean you are entitled to others.
If you’re struggling with the increased cost of living, it’s worth checking you’re claiming any and all payments you might be entitled to – it could make a difference.”
Neil Hugh outlines the key things to be aware of when it comes to state benefit eligibility:
What key benefits should I look out for?
“There’s a wide range of benefits available, and conditions that may make you eligible include:
- being temporarily unable to work, including because of ill health;
- if you’ve been made redundant or are looking for work;
- if you’re raising a family or have a child who is disabled;
- if you’re disabled or have a health condition;
- if you’re caring for a loved one;
- or if you’ve lost a loved one.
If you’re struggling to pay bills, have lost your job, aren’t able to work or are on low income, you might want to consider claiming Universal Credit. This is a payment for people over 18 but under State Pension age. It includes support for the cost of housing, children and childcare, and financial support for people with disabilities, carers, and people too ill to work. It’s paid monthly – or twice a month for some people in Scotland. To make a claim all you need to create a secure Universal Credit online account.
If you’ve reached State Pension age and are on a low income (this varies depending on your date of birth), you could be eligible for Pension Credit. Pension Credit tops up your weekly income to £182.60 if you’re single, or your joint weekly income to £278.70 if you have a partner. It can help with your living costs and can also help with housing costs such as ground rent or service charges. It’s separate from your State Pension and you can get Pension Credit even if you have other income, savings or own your own home. The DWP estimate up to 1 million households who are entitled to Pension Credit do not claim it, so if you are over state pension age please do make sure to check if you are eligible.”
How can you find out if you’re missing out on benefits you're eligible for?
“The good news is there’s plenty of support to help you check and claim.
A good first port of call is to visit the benefits calculators page on the government website GOV.UK – it’s an excellent source of information when it comes to finding out what you might be entitled to. It has a series of online calculators providing information on income-related benefits, tax credits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work or change your working hours.
Before using the benefit calculators you’ll need some key details to hand, including any savings, your single or joint income, your single or joint existing benefits, any income from a state or personal pension and any outgoings such as childcare, rent etc.
Another option is MoneyHelper, a government-backed, free, impartial guidance service for money and pensions, which has a handy benefits page to help you find out what you’re entitled to, how to claim, when you qualify, and what to do if things go wrong.”
What information do I need to check if I’m eligible?
“To check if you qualify for state support, you just need some key details to hand:
- Any savings
- Your single or joint income
- Your single or joint existing benefits
- Any income from a state or personal pension
- Any outgoing such as rent, childcare etc
What happens if I take money from my pension?
“It’s important to be aware that if you already receive government benefits such as Universal Credit or Pension Credits, you may lose eligibility if you take an income from your pension.
This is because money from your pension is treated as additional income and may impact your eligibility to claim certain benefits. If you’ve withdrawn more than the 25% tax-free cash part of your pension pot, you may need to pay tax if your income rises above your personal allowance (£12,570 for 2022/2023 tax year). Tax rules may change, and tax treatment depends on individual circumstances and where you live in the UK.
What else can I do to make my money go further?
“A good start is to get the full picture of your finances. Think about what’s coming in and going out. Look at your income, bills and other outgoings to see what’s leftover and where you could make cuts. Having a clear budget could help pay off any debts and free up some money each month.
It’s always a good idea to review your bills and subscriptions and check if you are on the best possible deal with your mortgage, broadband, phone, energy, insurance, or TV. Taking the time to call a provider and review your plans could bring significant savings. It’s also worth looking at subscriptions – if you’re not making the most of them, consider cancelling.
Always deal with priority debt first. If you’re struggling to make repayments on a mortgage, credit card or other loan, talk to your provider. They could help until you’re in a better financial position, by extending the terms of your loan, adjusting repayment amounts or allowing a payment holiday. If you have a credit card with a high interest rate, check for balance transfer offers. If you’re unable to repay your debt, you could consider a Debt Management Plan, which is an agreement where you pay your creditors a small amount each month.
It might seem obvious, but it’s always worth having a think about where you can cut back on day-to-day spending. Before going food shopping, plan your meals, make a list and stick to it. Could you swap out more expensive foods or switch to value brands and budget supermarkets? If you’re in extreme difficulty, Citizens’ Advice could help refer you to a food bank. If you shop online, reduce browsing time to reduce temptation and any unplanned purchases. You can also think about if it is possible to walk or cycle to work, or work from home to cut commuting costs.”
2 Standard Life Retirement Voice 2022
About Standard Life
- Standard Life is a brand that has been trusted to look after peoples' life savings for nearly 200 years
- Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers' pension scheme.
- Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We're proud to be building on nearly 200 years of Standard Life heritage together
- Our products include a variety of Pensions, Bonds and Retirement options to suit people's needs, helping our customers to invest and save for their future. We're proud to offer a leading range of sustainable and responsible investment options.
- We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about
- The value of investments can go down as well as up and may be worth less than originally invested.