Unclaimed benefits could ease debt management worries

Around £10.5bn worth of income-related benefits went unclaimed in 2007-9 in Britain, which could have eased many people’s debt management issues.

The figures, published annually by the Department of Work and Pensions (DWP), showed that between 15 – 23% of all entitlement money went unclaimed from the five key income-related benefits – Income Support, Jobseekers Allowance, Pension Credit, and housing and council tax benefits.

The report showed that the take-up figures for three of the five benefits showed a slight decrease when compared with the previous year. Housing Benefit, Income Support and Council Tax Benefit all dropped by around one percentage point.

Jobseekers Allowance take-up remained relatively unchanged, and the proportion of people claiming Pension Credit rose by one percentage point.

Debt advice organisations have been urging people to claim all the benefits that they are entitled to, to ensure that they can maintain their credit commitments and other household bills.

Ivan Cooper, Chairman at the UK’s leading debt management company Chiltern said: “Many people do not claim because they aren’t aware that the benefit exists or that they are entitled to it. Often we find that they are confused by the complexity of the system, or they don’t want to appear as taking “handouts” from the state.

“More could be done to speed up the automatic allocation of these benefits, as over £10bn pounds has gone unclaimed. This could dramatically help those with debt problems who are in serious need of help with their debt management.”

Angela Eagle, Pensions minister, said: “We want to make sure that everyone is getting all of the help that they are entitled to and we are always working to make our benefits more accessible.”

Fees & Information

We cannot guarantee a reduction in interest or charges. If an IVA is not maintained it could lead to bankruptcy. Whilst initial debt advice is free, fees will be charged if a solution is taken out.

Fees related to Debt Management Plans are in two parts;

"Initial Fee" means your first two "Monthly Payments", which is paid by You to "Us". This represents our fee for establishing your arrangement, and therefore is not distributed to your creditors, and can be paid in two separate instalments. Retention of this fee will put you into further arrears.

"Monthly Fee" means the Fee payable for our Services each month. This is an amount equal to 17.5% of your "Monthly Payment" (apart from your first two "Monthly Payments" which is the "Initial Fee"), subject to a minimum payment of £30 for disposable incomes of 0 - £100, and £35 for disposable incomes of £100.01 - £200.

Fees incurred for Individual Voluntary Arrangements are variable dependent upon the monthly contribution to the arrangement and the agreement that is reached with your creditors. Fees are made up of Nominees fees relating to assistance given to prepare your proposal and Supervisor fees which relate to the ongoing monitoring of your IVA. Fees are already included as part of your monthly contribution. The level of fees and the method of payment are both agreed by your creditors at the outset of the arrangement.

A record of your agreement with us will be held on your credit file for up to six years, and your ability to obtain credit in future may be affected.

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