Benefit myths busted: Are you a working family missing out on free cash support?

Think benefits are only for people who don’t work? Think again, as that myth could be costing your family thousands of pounds.

With bills soaring and the cost of living continuing to rise, financial support like universal credit (UC) can be a vital lifeline for working households on low or moderate incomes. Yet millions of families aren’t claiming what they’re entitled to.

According to the latest report from social policy experts Policy in Practice, an estimated £24.1bn in benefits and social tariffs will go unclaimed in 2025–26.

The main barriers holding people back from claiming are lack of awareness, complicated rules and stigma.

So, let’s bust the most common myths.

Myth 1: “I work, so I can’t claim benefits”

Wrong.

Universal credit is designed for people in work and out of work.

If you’re working but on a low income, you may still qualify. The standard monthly allowance is £400.14 if you’re over 25 and single, that’s around £4,800 a year.

As your earnings increase, your UC payment reduces gradually. In some cases, you can earn up to £684 a month before your payment starts to go down.

Myth 2: “My partner and I have savings, so we won’t qualify”

Wrong again.

You can usually claim universal credit if you have up to £16,000 in savings, investments, or money in the bank, either alone or as a couple.

• under £6,000: savings don’t affect your claim
• between £6,000 and £16,000: your payment is reduced
• for every £250 over £6,000, your UC is reduced by £4.35 a month
• even part amounts count, another £4.35 is deducted for any remaining balance that isn’t a full £250

Myth 3: “I own my home, so I can’t claim”

Wrong.

If you own and live in your home, its value is not taken into account when assessing universal credit.

Homeowners, including some with mortgages, may still qualify depending on their circumstances.

You must tell HMRC about certain assets, including:

• Money from the sale of your home, even if you plan to buy another. These funds are usually ignored for six months and longer in special circumstances.
• Property you don’t live in, unless it’s the main home of:
• a close relative who is retired or seriously ill
• a former partner who is a lone parent

You must also declare any property or assets you have a financial interest in, such as:

• holiday homes
• caravans
• land
• buy-to-let properties
• property where your name is on the mortgage, even if someone else lives there

Myth 4: “It’s not worth claiming for small amounts”

Small payments may not look like much, but they add up over time.

More importantly, qualifying for universal credit can unlock other support, including:

• council tax reductions
• help with rent or childcare costs
• energy discounts and social tariffs

UC can be the gateway to much wider help.

Myth 5: “I earn too much to get help with children”

Many parents miss out on tax-free childcare because they assume it’s only for low earners.

In reality:

• you can claim tax-free childcare if you earn up to £100,000
• it’s worth up to £2,000 per child per year
• child benefit starts to reduce if one parent earns £60,000
• it stops entirely when earnings reach £80,000

Don’t miss out 

If you’re not sure if you qualify for universal credit and other state benefits, we can help.

You can either give us a ring and we’ll check for you, or use our free benefits calculator to see what support you could get.

Remember

If you’re already receiving universal credit and your work, income, or family situation changes, you must tell the Department for Work and Pensions (DWP).

Changes in circumstances can affect:

• how much universal credit you receive
• what work-related activities you’re expected to do

Staying informed helps you get the right support and avoid problems later.