In the UK, the rate of child poverty is staggering: 29% of all children are in poverty. Extensive evidence shows that growing up in poverty is harmful for child development as by age three, children from lower-income backgrounds are at a greater risk of falling behind in cognitive and socio-emotional development. This has life-long implications — increasing the chances of poorer adult health, wellbeing and income. 

However, there is evidence to suggest that increasing family income can improve early childhood attainment and that these gains have long-term benefits through adulthood. This is why we are exploring different ways to evidence and break the link between family income and child outcomes. One approach we looked at is to maximise families income from current benefit entitlements. 

For families in poverty experiencing the financial pressure of parenting young children, every bit of additional income may make a difference. Yet analysis by Policy in Practice suggests that £19bn in benefits are unclaimed each year by people who are entitled to the support. The Department for Work and Pensions and HM Revenue & Customs estimate that only 84% of those entitled take up the Child Tax Credit, while other benefit entitlements have estimated take up rates between 66 and 90%.

We believe that by improving the service quality and scalability of income maximisation tools and services we can make it easier for families in disadvantage to access support — enabling a more optimal home learning environment for children. We were interested in working with existing tools and services that have extensive experience supporting parents and families to claim their entitlements.

Our aims for this project were to:

1. better understand the landscape of income maximisation tools and services
2. estimate how much money is unclaimed, by who, and for which benefits 
3. develop hypotheses about where Nesta can support the sector - whether that be through developing new product features or partnering with others to enable the scale up of these services.

In collaboration with the Behavioural Insights Team, we undertook a fairly rapid project to meet these aims.

We looked at the wide range of tools and services available, including digital tools and in-person support services. We used user design and behavioural science to map the user journeys and points of friction or opportunity for families who may use benefits calculators and support services to claim their entitlements. Finally, we used data from the Family Resources Survey to develop estimates of which groups of people are not claiming their full entitlements and which benefits are going unclaimed – estimates which are not currently available.

Throughout, we spoke to experts, academics, policymakers and front-line practitioners about their ideas, and how we might be able to help. 

This work was completed earlier this year and we will be publishing the full findings of our analysis this summer. We learned that the scale of families claiming benefits is significantly low –  leaving thousands of pounds on the table. As we prepare to publish these results, we are developing more hypotheses to test how to increase uptake among eligible families.

Our analysis suggested the landscape of income maximisation services and tools is fairly robust – with organisations like InBest using technology to drive new innovation in this space. However, the process for claiming benefits is still complex, as families need to submit their information several times before receiving support.

We believe there are significant gaps in people’s awareness and willingness to act, likely related to stigma, confusion, complexity and low trust in the process. Our work going forward is focused on tackling these barriers to boost uptake and to strengthen access to benefit entitlements for disadvantaged families.

Moria Sloan, Mary-Alice Doyle and Dr Abigail Mottershaw