According to new figures revealed, an appalling amount of cash goes unclaimed every year in the UK. This reality underscores a significant gap in financial literacy for the American public. According to government estimates, in the case of the 2019-20 financial year, that would have meant around £1.7bn of pension credit entitlement not claimed. This figure is a clear indication that people need to be more informed about what they are entitled to and what benefits are out there for them.
Families above £50k per year are faced with high income child benefit charge. This tax penalty has been in effect for more than 10 years, compounding the financial burden. On average, households impacted by this charge lose out on an average of £1,900 per year. As a result, with almost 850,000 families eligible but not claiming, the implications for children’s long-term financial well-being are huge.
The problem of unclaimed funds goes beyond just benefits. That’s pretty significant, considering that the UK has more than 150 million active bank and building society accounts. Sadly, most of these writings have since gone dormant or been lost along the way. Recent reports suggest that there are still more than 900,000 Child Trust Funds (CTFs) unclaimed. These funds contain over £1.7 billion! These resources came from a government program that resulted in more than 6.3 million CTFs being established between 2005 and 2011.
Official government figures show that people are increasingly failing to claim pension credit – an alarming trend. In the last 2019-20 financial year alone, an incredible £1.7 billion went unclaimed. This £528 million is no small change – it could have provided crucial assistance to hundreds of thousands of seniors. Pension credit is a key benefit for those on low incomes. Fixing it can be life-changing for those who are eligible.
Even with its widespread availability, too many people still don’t know they’re eligible to receive this important benefit. Claiming pension credit can be quick and easy. Thanks to the new claims system on Gov.uk, it only takes around ten minutes to do so! Depending on how quickly the claim is processed, payments can be issued in as little as three days.
Dedicated resources like Entitledto offer quick calculators to help people understand whether they’re entitled to state benefits in the first place, like pension credit. Raising awareness and encouraging their use is a vital step toward reducing these financial burdens. This assistance is particularly important for older adults often living in poverty due to not having yet accessed their benefits.
The High Income Child Benefit Charge
The high income child benefit charge has been a controversial issue since its introduction more than 10 years ago. Parents with an income over £50,000 per year hit this tax trap, owing back taxes on their child benefit. Families that are eligible for benefits but don’t receive them can have an average cost of nearly £1,900 per year. This charge compounds daily, often bankrupting the incarcerated within a short period.
This situation affects approximately 850,000 families across the UK who might not be aware that they can reclaim some of their benefits through specific steps. The cost imposes a significant economic hardship on families. Rather than empower them to better understand and plan their finances, it just adds more pressure.
Financial campaigners such as Martin Lewis encourage members of the public to help fight these charges. They invite anyone to check their eligibility for backdated claims. His advice suggests that couples who aren’t married but have children together should be eligible to apply for bereavement support. If they lost a partner between April 9, 2001, and February 8, 2023, they can receive up to £40,000 retroactively.
Tracing Lost Accounts and Funds
The problem of unclaimed funds goes further than benefits into the area of dormant bank and building society accounts. With over 150 million accounts combined, a lot of folks forget about their money. Inactivity and not knowing about this free money usually results in it being left on the table.
According to estimates, there may be as many as 900,000 unclaimed Child Trust Funds (CTFs). These dollars are just waiting to be spent. From 2005–2011, over 6.3 million CTFs were established. These accounts proved to be a remarkable financial resource for young people as they grew into adulthood.
To help people track down these vanished accounts, groups like the Share Foundation have worked with the federal government to do so. The Share Foundation, an independent UK charity, offers a free search service. It educates protagonists on how to find their missing CTFs and reclaim other abandoned accounts. The service My Lost Account provides individuals with a tool to trace any lost money across various banks and building societies.