Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

IFS: Universal credit to hit low income households hardest

  • Comment

The roll-out of universal credit will result in the poorest households losing the most when income protections during the transition period expire, research by the Institute for Fiscal Studies has found.

The analysis published today, which examined the impact of universal credit over an eight-year period for the first time, shows while many of the biggest reductions in income are temporary, those claimants whose incomes are in the lowest tenth will lose, on average, £100 per year - more than any other income group.

The IFS found around 4.2 million of the 11 million adults eligible for some universal credit will be at least £100 a year better off under the new system, while 4.6 million will be at least £100 worse off once top-up payments to ensure no one loses out under the new system end.

In any one year, one in three adults entitled to benefits will experience a change in their entitlement of at least £1,000 a year, with 1.6 million gaining and 1.9 million losing. However, over an eight-year period 0.6 million will gain and 1.2 million will lose by the same amount.

IFS research economist Tom Waters said: ”The biggest losses experienced as a result of the switch are mostly down to a small number of specific choices the government has made about universal credit’s design, such as its treatment of the low-income self-employed and people with financial assets.

“Many of those very large losses do turn out to be temporary for those concerned. However, even when measuring people’s incomes over relatively long periods, universal credit still hits the persistently poor the hardest on average.”

The research was funded by the Economic and Social Research Council and Understanding Society.

  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.