Low-income families will be worse off because of cuts to Universal Credit despite tax changes and a higher living wage, research for the Joseph Rowntree Foundation (JRF) found. By 2022, families with one working parent will lose more from cuts to the benefits system than they gain from increases to the living wage.
Single people without children and a hypothetical family of four with two working parents will be better off, That is if they are earning the national living wage, living in low-cost housing and claiming Universal Credit. But “all households who are out of work will be worse off in 2022” and single-earner households will struggle.
JRF chief executive Campbell Robb said: “People across the UK are struggling to afford a decent living standard, even if they have a job. Families with only one parent in work are facing particularly hard times, with changes to Universal Credit and other benefits meaning that they are in a worse position even after increases to the national living wage."
Donald Hirsch, director of the Centre for Research in Social Policy at Loughborough University, which conducted the study, added: “These figures show that there are a wide range of losers from present policies, with some of the worst off families projected to have to live on barely half of what they need."
The Women’s Budget Group (WBG), claimed women and people from ethnic minorities would be “hardest hit” by changes to Universal Credit. It analysed the effect of cuts to the work allowance, payment freezes and other elements.
More than two million working women who claim the benefit are in line to lose an average of £1,400 a year, it claimed, with black women set to be £1,500 worse off annually. And tens of thousands of Asian families with three children or more could lose £1,370 due to the new two-child limit, WBG said.
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