As many families in the UK face increasing financial challenges, new research by family finance expert, OneFamily, has revealed that 52% of UK adults who think they are eligible are not taking advantage of a range of available financial support – including savings incentives and tax credits - offered to families by the Government.
When asked why they had not claimed for the different types of financial support provided, the main reason cited, by 41% of those who thought they were eligible after reading the criteria, was that they were not previously aware that they could benefit. 14% said they had not applied because they thought that the savings they could make would not be significant enough to make it worth their while applying.
OneFamily asked more than 2,000 adults about a range of available financial support, including Marriage Tax Allowance, Child Benefit and Junior ISAs. The aim of the research was to identify how families could benefit further from the support already available to them, and what guidance they needed to help them make the most of this.
Simon Markey, CEO, OneFamily, commented, “We know that families are under increasing financial pressure, with almost half (48%) of all adults who have provided support to a family member saying they have done so just to help them cover simple general living costs. Almost a quarter of people (24%) would like to be able to give their families more financial support than they already do.1
We’ve looked into the options available for families and our research has discovered that many are not making the most of the potential savings already on offer, because they are simply not aware that they could benefit.”
- Less than half of those surveyed knew about childcare vouchers (48%)
- Almost half (46%) of those who are married were unaware of Marriage Tax Allowance
- 44% of people had heard of free childcare for 3-4 year olds, a scheme that the Government will be extending in 2016
- More than two thirds of people were unaware of the childcare element of the Working Tax Credit (71%).
- Only 4% had heard of Class 3 National Insurance credits
"If all those adults who think that they are eligible for free childcare for 3-4 year olds but are not currently claiming it received the maximum support available, UK families could be an additional £3.8bn a year better off."
As an example of the savings that could be made, if all those adults who think that they are eligible for free childcare for 3-4 year olds but are not currently claiming it received the maximum support available, UK families could be an additional £3.8bn a year better off. These potential savings are set to increase: from 2016, the number of hours of free childcare that parents are entitled to will double to 30 hours a week.
The most potentially underused money-saving policy is the more recently introduced Help to Buy scheme. Whilst 19% of respondents think that they are eligible for the scheme, less than 1% are currently benefitting. Marriage Tax Allowance was the second highest unclaimed allowance: only 3% of UK adults said that they were claiming the allowance, when 18% thought that they were eligible. Of the married couples surveyed, only 6% said they were claiming the allowance, in spite of 31% thinking they are eligible. Almost half (46%) of all married adults were unaware of its existence. The policy allows couples made up of one non-taxpayer and one basic-rate taxpayer to share some of the non-taxpayer’s unused annual income tax allowance, resulting in savings of up to £212 a year.
Another form of underused financial support for families is Specified Adult Childcare Credits, which allow grandparents who are looking after their grandchildren to claim National Insurance credits. Just 6% of grandparents had heard of the credits, and less than 1% of the grandparents surveyed had claimed them.
The research also found that family members are the top source of financial guidance, followed by money advice websites, cited by 17% and 15% of UK adults respectively. A financial provider is the main source of money advice for 9% of people, with even fewer (1%) using official government guidance.
Simon Markey, CEO, OneFamily, commented, “We’d encourage families, parents and grandparents to check whether they are eligible for the kinds of savings we’ve looked into. Individual families could be hundreds of pounds better off each year as a result.”
The OneFamily.com website provides a quick overview on eligibility criteria for the various financial savings outlined in the research and signposts where families need to go next to apply in order to benefit.
1. 52% adults who think they are eligible for at least one of a range of policies listed