Maximising the income of people in financially vulnerable circumstances – the tools that make a difference

Did you know that there are £19bn in unclaimed benefit payments and social tariffs each year? That’s the updated figure from Policy in Practice which shows an increase of around £4bn per year.

What does this mean in practice? Well, simply put this means some of the most financially vulnerable people are missing out on vital income – especially as we’re now almost 2 years into this latest cost of living crisis. Of the benefits available, Universal Credit and Council Tax support are the most underclaimed each year:

• 1.2m eligible households are missing out on their share of £7.5bn of Universal Credit
• 2.7m eligible households are missing out on their share of £2.9bn in Council Tax Support

Why are these numbers so high?

Number of different causes & outline barriers facing people when it comes to claiming entitled income including. 

• administrative complexity of applying for various entitlement
• lack of awareness
• stigma
• fragmentation and varying support depending on where someone lives

What are income maximisation tools?

Income maximisation tools can make a significant difference to people in financially vulnerable circumstances. These tools can help people to identify and claim all the benefit payments they are entitled to, which can provide them with a much-needed financial boost.

These tools can be stand-alone calculators that sit on third party websites, but we’ve been working to incorporate these as part of existing journeys, for example as part of a loan application, declines or as part of a member portal.

Income maximisation tools can be a valuable resource for people in financially vulnerable circumstances. By using these tools, people can improve their financial situation and build a brighter future for themselves.

Salad Money has seamlessly integrated a benefit check feature into their lending process. Jason, who applied for a £1000 loan, was provided with a potential claim amount based on his application and open banking data. After completing a thorough benefits check, he discovered an additional £200 per month.

He says ‘’I would have never ever thought about applying for those things, had I not gone through this process…[it] takes the pressure off myself…we can start doing things we have not been able to do’ 

How can we make a difference?

We’ve been working with social purpose driven fintech organisations like Inbest.ai, Policy In Practice and Lightning Reach to implement income maximisation tools into a range of different customer journeys – making it simpler and easier for people to boost their income with missing grants or benefit entitlement.

Inbest.ai

The most common reason why people miss out on their benefits is that they are unaware of the welfare benefits they are entitled to or assume that they are not eligible. Inbest believes that the most efficient way to raise awareness of unclaimed benefits is by sending proactive and personalised notifications, letting individuals know about the additional income they can get. This can be achieved by seamlessly integrating our benefits calculator into the banking journeys individuals already use. Affordable lending is one of the best journeys to incorporate a benefits check, as individuals often turn to these companies for emergency cash, and in most cases, they are entitled to benefits.

Inbest have been working with some of Fair4All Finance key Investee’s and partners such as Moneyline, Enterprise Credit Union, Plend and Salad Money to integrate their check In their customer journey.

In 2023 alone, Inbest have identified and matched an astonishing £4.6 of unclaimed benefit payment to 1000 individuals, increasing their income by an average of £460 per month. This is just across the organisations listed above.

Inbest is also working on exciting new developments that are set to create a more inclusive approach to addressing financial challenges. One of their key initiatives aims to create a seamless connection between people facing financial hardships and a pathway for early intervention.

By bridging the gap between those in need and the necessary support, Inbest aims to make financial well-being more accessible and proactive.

‘We are super grateful to Fair 4 All for their invaluable support in delivering this proposition. They have been involved in every step of the process, from presenting this solution to Credit Unions and CDFIs to integrating the benefits check into lenders’ tech platforms, and everything in between. We keep working closely with Fair4All Finance and affordable lenders to deliver exciting new features to unlock the full potential of local banking and enhance the financial resilience of communities across the UK.’

Manuel Peleteiro – Co Founder of Inbest  

Policy In Practice

Fair4All Finance has helped Policy In Practice develop its ability to integrate income maximisation smoothly into existing customer journeys. From debt advice to loans, credit and collections as well as into customer portals and general guidance pages, this is boosting people’s financial stability and improving customer experiences.

The development has led to the Better Off Calculator being contracted by Debt Free Advice (Toynbee Hall) as part of their referral route to debt advice. Customers will complete the Better Off Indicator and submit this with their contact details to request a callback. An advisor from Debt Free Advice would then call the customer and complete full benefits check with them via phone or video call and update a customer’s record.

DFA looks after around 44,000 customers every year – the calculator will be a key part of their multi-channel approach to support, allowing customers to access the service online and initiate a call with an advisor for support.

‘Working with Debt Free Advice and Fair4All Finance to integrate income maximisation into the debt advice journey has been a great experience. The approach and lessons learned are already being applied in other sectors, including utilities, finance and local government, to build on the powerful impact this project has already delivered.‘

Deven Ghelani, CEO Policy In Practice

Lightning Reach

Lightning Reach’s platform raises awareness to local, regional, and national financial support and can reduce the time from application to receiving funds from weeks to days. Fair4All Finance and our partner JP Morgan Foundation have committed significant resources to creating a tool that;

• Expand available schemes: Add more local authority, charitable, and organizational grants to the portal.
• Onboard more organizations: Bring in additional organizations to manage their grant applications through the platform, streamlining the application and approval process for customers.
• Enable referral partner functionality: Introduce a feature that allows advice agencies and support workers to search for and apply for grants on behalf of their beneficiaries, reaching digitally excluded clients and saving time on research and applications.
• Utilize data for impact and customer experience: Leverage data to analyze the impact of organizations and improve the overall customer experience.

Lighting Reach and Inbest are playing a key role in our successful implementation of the no-interest loan scheme, enabling us to fulfil our key commitment of assisting customers in finding alternative sources of financial support. Their partnership has not only provided additional support to our customers but also served as a preferred option for those seeking assistance beyond the scope of our No Interest Loan Scheme.

Luke (a customer) who applied for a grant from RAF Benevolent Fund on the Lighting Reach platform said – ” The idea and principle of Lightning Reach is amazing, whoever is the brainchild needs a pat on the back. Putting all support under one click of a button has taken all the stress away from applying for support – it’s been a massively positive experience.”

Loan Management Systems (LMS), High Street Banks and FinTech’s

We have partnered with LMS providers, including Incuto, SOAR, CU Apps, Nivo, and Nest Egg, to seamlessly integrate a benefit check within their lending, declines and member portal journeys.

If you are a lender leveraging these systems to provide exceptional service to your members, we encourage you to get in touch with either the LMS providers or us directly. Discover how this innovative feature can empower your members to understand their entitlements.

Additionally, in support of individuals in vulnerable circumstances, Fair4All Finance is offering to fund the first-year usage fee for a limited number of our credit union and CDFI stakeholders. This opportunity allows us to assess the impact of this feature on financial resilience.

A similar approach can also be utilised with high street banks and FinTech’s with the technology they utilise, and we encourage all providers to move beyond signposting and explore how they can proactively increase awareness of unclaimed entitlements and access to support.