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Universal credit: what the £20 a week cut will mean for hundreds of thousands of households

After a year and a half, the temporary £20 increase to universal credit introduced during the pandemic is coming to an end.

The adequacy of benefits has deteriorated gradually over the past decade. In 2010, the family safety net was worth about two-thirds of the minimum income standard. Today it is barely half. This £20 cut will be a sharp blow to the 6 million claimants already struggling to get by on low incomes.

To understand the implications of the cut, we need to compare what people can afford while on universal credit, to what they actually need.

For the past 13 years, my team at Loughborough University’s Centre for Research in Social Policy has captured what the public considers to be a minimum living standard, allowing people to meet their material needs and participate in society.

This minimum income standard is compiled by asking groups of members of the public to discuss and agree on a detailed list of items that should go into a minimum household budget.

After costing and adding up these lists, we estimated that in 2021 a single person would require £213 a week, with different amounts specified for households according to how many children and adults live in them. More than one in four people in the UK do not have enough to afford these budgets, but they represent what people think is needed to live in dignity in the UK today.

The £20 cut to universal credit will place many hundreds of thousands of households below this minimum income standard.

The following cases illustrate how this cut could impact the livelihoods of two different households – with and without children – in urban areas outside of London.

Case 1: a single person, driven to destitution

A single person over the age of 25 and out of work will have their entitlement cut from £94.70 to just £74.70 per week. This is to cover all their costs other than rent and a partial rebate of council tax, to which people on very low incomes are eligible. This is only about a third of what they need to reach the £213 minimum income standard.

Let’s look at what they can afford on that £74.70.

Continues…

‌Image: Getty

For the full article by Professor Donald Hirsch visit the Conversation.

Notes for editors

Press release reference number: 21/211

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