Potential benefit
£28-30 p/week uplift for an adult on universal credit - 7.5M people.
Significant public support: 72% for essentials guarantee, 66% believe universal credit too low.
Potential cost
Approx £20B universal credit uplift.
Offset at least in part by increases in tax revenue.
———
Costs for essentials like food, energy, and housing have gone through the roof, but social security payments haven’t kept up—they’ve actually dropped in real terms over the last 20 years. According to the Joseph Rowntree Foundation, essentials cost around £120 a week for a single adult, but the Universal Credit allowance is only about £85 a week before deductions. This means millions of people on Universal Credit are struggling to afford basic needs, with 9 in 10 low-income households going without essentials. This is a reversible situation, and government intervention would alleviate the most acute poverty faced by so many; 15% of people in the UK live in absolute poverty before housing costs, and 18% after, representing around 12 million people.
The government should set a legal minimum income for people receiving Universal Credit, the central pillar of our social security system, and this must be the absolute floor of support. Even if someone has money taken away for debts or sanctions, their payments wouldn’t fall below this minimum level. This should be reviewed every year by an independent group based on what essentials actually cost. This group would look at a ‘basket of goods’ including food, bills, clothes, travel, and extra costs people face, and recommend changes to make sure benefits cover those costs. This mirrors the ‘Essentials Guarantee’ proposed by the Joseph Rowntree Foundation and Trussell. It would work like the minimum wage system, which now considers the cost of living when setting pay rates. As a part of this, it is also vital that eligibility for Personal Independence Payments is not further restricted, to protect those in receipt of this benefit. These changes would help lift millions out of poverty, making it easier for people to afford bus fares, meals, and other basics needed to live with dignity and also be able to find and keep work.
The Joseph Rowntree Foundation estimates raising Universal Credit to this essentials guarantee level would cost around £20 billion a year. However, this doesn’t take into account the extra tax revenue from people being able to work more, or the savings from less pressure on public services thanks to fewer people living in poverty.
