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If the government is serious about encouraging a pre-Christmas shopping spree, rather than cutting VAT to 15%, it should ensure the full take-up of benefits and tax credits. An astonishing £14bn goes unclaimed each year by people who are either unaware that they may be eligible, too embarrassed to claim, or baffled by the complexity of the system.
Turn2us, a charity that officially launches an online service tomorrow, aims to help members of the public who are struggling to make ends meet to access £150m worth of benefits, tax credits and grants over the next three years. Jolanta Lasota, the charity's chief executive, says: "People need to be aware of all the sources of financial help available to them so that they are equipped to make the right decisions to tackle their immediate crisis and ensure their long-term financial health."
Research by the charity has found that people trying to cope with financial problems are more likely to take on debt by borrowing from banks than to seek out alternative sources of help, such as grants from charities. Only 4% of respondents who had fallen on hard times considered turning to charities for help. The first port of call for a quarter of people was taking out a bank loan, and a further 14% would use a credit card rather than seek charitable assistance.
The study also discovered that despite the UK having more than 3,300 voluntary organisations with a grant-giving remit, 14% believed there wasn't anywhere they would be able to turn for help, but 84% said they would welcome a service that provided details of all the possible sources of help available.
When the pilot was launched last year, the charity chose not to mention "poverty" in its name or publicity because of any stigma people may attach to it. Now, with wage cuts and redundancy staring millions of people from all walks of life in the face, the charity will no longer be about maximising income but it will play an important part in the alleviation of poverty.
Fred Payne, chair of the Benevolence Today coalition, says increasing awareness during a recession is particularly important, and Turn2us could be a "vital bridge" to much-needed assistance.
Aneta Waldron, 53, found the Bankers Benevolent Fund through Turn2us. After more than 20 years in banking, she suffered an injury which meant she was unable to work and found it hard to make ends meet. Through the website she made an online inquiry to the fund and discovered she was eligible. So far she has received £1,600, which has helped with vital house repairs and heating costs.
From this month, Turn2us will also be promoting the service to professionals, from occupational therapists to health visitors, who could provide a useful first step in helping people to improve their finances. It will start by training Home Start UK's 15,000 parent volunteers, who visit families in their own homes to offer support, friendship and practical assistance. It is also piloting a telephone helpline, and leaflets will be distributed to job centre staff.
Its expansion couldn't be more opportune, but charities alone will not be able to solve families' financial woes. The chancellor's pre-budget report this week increased tax credits, committed £15m for an extension of free, impartial debt advice, and pledged a 50p contribution for every pound saved by people on lower incomes in a new national Saving Gateway account that can be opened in banks, buildings societies and credit unions. These moves are to be welcomed, but the government still needs to put a ceiling on interest rates charged by doorstep lenders so that people unable to access mainstream borrowing are not financially knee-capped by a modest loan. And mainstream lenders must improve access to their services to prevent the financially excluded falling prey to loan sharks. Without such measures alongside a benefits take-up drive, a trip to the shops will still be too costly for many this Christmas.
• Alison Benjamin is editor of Society Guardian. More details at turn2us.org.uk
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