Universal credit below essentials by £890 a month despite inflation-linked rating upgrade
No matter what we do for a living or where we live, we all want very similar things: a warm home, knowing our family and friends are safe, and the assurance that we can handle whatever life throws our way. But right now, it’s out of reach for too many of us.
Britain’s weak income safety net is forcing millions of people to make the impossible choice of whether to put food on the table or heat their homes. Our analysis shows that universal credit payments for single people aged over 25 are £890 per month less than the cost of living because rates are not benchmarked against a meaningful needs assessment. The underlying lack of support implies inflation of 10.1% in April 2023 – the increase in general credit and the cost of living cannot compensate for the 10% increase in costs faced by people, so the gap between the two widens. The shortfall has risen by £80 a month since April last year, and by £140 for couples over 25 to £1,550 a month.
To measure the cost of living, we use Minimum Income Standard (MIS) According to the calculation Center for Social Policy Research, Loughborough University. Household budgets for different household types are calculated based on what is considered necessary by the public for an acceptable standard of living. In our analysis, comparisons are made to MIS rates excluding housing and childcare costs, since these costs should be (at least partially) covered by the additional element of Social Security rather than the base support rate.
We found that at the start of April, the base level of universal credit support for single people aged over 25 was increased by £55 a month (this includes the increase in living expenses people will receive compared to last year). This barely makes up for the increased cost of groceries (£55), not to mention the added £135 per month to the total cost of living. Meanwhile, support for a couple aged over 25 has increased by £75, but their food and energy costs have risen by £130 compared to last year, and their total living costs have risen by £210 a month.
The analysis assumes that all three living expenses are received, otherwise the situation would be worse. The government has given no indication that cost-of-living payments will continue until 2024/25. This will mean that the basic level of support that people receive from social security will drop significantly, which means they will be further unable to pay their living expenses.
The underlying unemployment support rate is at its lowest real level since the early 1980s, but otherwise, Many get a lower base rate Deductions due to the five-week wait for the first payment or due to third-party debt. These households face an average monthly deduction of £62, bringing them closer to abject poverty.
We need a bold new way to provide income support to help all people meet the challenges of the rapidly changing world we live in. living income A bottom line of income sufficient to meet the necessities of life will be set, below which no one, whether employed or unemployed, will be able to fall.
Image: iStock
