Working age benefits not providing enough for some groups’ basic needs

17 January 2024

New research authored by Professor Donald Hirsch and published today by abrdn Financial Fairness Trust finds that the UK’s social security safety net is falling woefully and systematically short of protecting citizens against hard times.

Declining value: Over the past decade, The UK’s inadequate and unfair safety net  finds that working age benefits have fallen to historic lows, relative to both prices and earnings. In today’s prices, weekly working age benefits for a single person are worth £84.30 (13% of average earnings), while in in 2012 they were worth £96.44 (15% of average earnings). For a couple with two children, weekly working age benefits are worth £307.73 (47% of average earnings), while in 2012 they were worth £351.51 (56% of average earnings).

Shortfalls in meeting basic human needs. Professor Hirsch’s paper also finds that cuts leave people having to forego some of the key essentials of life, with some groups not even having enough to cover food and home energy requirements.

In 2023, the cost of food and energy needed for a single person was 22% more than their benefit income provided. Spending any money on other essentials like clothes, transport and toiletries would require foregoing even more of an individual’s food and energy needs.

This is picture has worsened significantly over the last decade. In 2012, a single, working-age adult needed to spend 73% of their weekly benefits to cover food and energy. This left them with just under £19 to cover essential items such as clothing, transport and personal goods and services.

Inconsistency across groups. There are wide variations in the extent to which different groups’ needs are met. There appears to be no stable policy based on what relative levels of support is considered fair for different groups. In practice these levels tend to have diverged, due to much more favourable uprating conditions for pensioners, as well as new conditions such as limiting means-tested family support to two children (in England and Wales).

However, for all groups, levels of benefit provision are now lower than the Minimum Income Standard (MIS)*. For working age people without children, the UK’s safety net provides 27% of what would be required to meet the MIS, for families with children, working age benefits provide around 40% of the MIS and state benefits for pensioners provide 78% of the MIS.

Holes in the net: The majority of people who need benefits to survive have even less to live on than standard benefit rates imply. This can be, for example, because they are paying back loans taken out while waiting for their first payment, because they have their benefits capped or subjected to the two-child limit, or because their rent is not fully covered by the housing component, so they need to top this up by drawing on the daily living component.

The paper concludes that to create a fairer system, the single most important change should be for governments to be explicit about their approach to maintaining benefits at fair levels. As a minimum, this should start by creating stronger guarantees of a safety net that does not fall in real terms. Ideally, it should also involve a path to improving the very low living standards of working age claimants without work.

*The Minimum Income Standard  is a research method to identify what incomes different types of households require to reach a socially acceptable living standard

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