The DWP has announced a new initiative to “help first-time buyers and welfare claimants realise the dream of home ownership”. While the Benefits to Bricks details are still scarce, the DWP unveiled two changes for the calculation of means-tested benefits:
We have used our benefits engine and analytics platform to understand the impact of this new initiative on our customers’ financial lives. We simulated the effect of adding mortgage payments to the housing support component, and then, we compared the results with customers’ existing benefits entitlement and their unclaimed benefits.
Homeowners are the third biggest segment (16%) after private renters (37% and social housing renters (16%). The following charts compare the circumstances, financial situation and benefits entitlement of homeowners versus all our customers.
The Benefits to Bricks will help 56% of homeowners to increase their benefits entitlement by £390/month on average or £4,600/year. In the following charts, we can see the distribution of the benefits entitlement increase and the resulting total benefits entitlement distribution.
Looking into further detail, struggling and squeezing working families will be the most positively affected by this initiative as their benefit entitlement can increase up to £600/month, or £7,000 a year.
The main challenge to deliver this initiative is that the Benefits to Bricks will create a new wave of benefits claimants, but even now, the segments that will benefit the most are still not claiming all the support available to them. For example, almost all of the struggling working families are missing on average over £1,000 a month on benefits. The following charts detail the existing unclaimed benefits according to each household type and their take-home income.
The most common reason why people miss their benefits is that they are unaware of the welfare benefits they are entitled to or assume that they are not eligible. So if people think they are not entitled to any benefits, why would they check, right?
We partner with financial service firms to automatically identify households with unclaimed benefits, nudge them to check their benefits entitlement and support them on their benefits applications. Financial service firms embed our benefits platform in their user journeys to make sure that their customers are getting all the support available to them while increasing customer loyalty and engagement.
Feel free to reach out if you want to explore how you can embed a benefits check into your banking journeys and view our benefits platform in action!