Importance of the £20 a week Universal Credit increase in mitigating social security losses to families since 2010
Over the past decade, a series of government policies have led to large cuts to social security entitlement. Nearly 100 cuts have been made, including decisions to freeze non-pensioner benefit rates, and to increase them by less than inflation. The cumulative effect of these policies totalled about £36 billion annually pre-COVID-19. However, this total number masks the fact that the impact of these policies varies considerably for different households.
Most notably, the triple lock has protected the social security of pensioner households. But even within working-age households, the impact has differed considerably across a range of factors such as number of adults, number of children, working status and housing tenure. In particular, households with children have faced the brunt of these cuts, and larger families have fared particularly badly.
In March 2020 a series of measures was announced to protect household incomes in the face of the large labour market disruptions caused by COVID-19. Alongside the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS), a key policy was raising the Universal Credit standard allowance and Working Tax Credit maximum amount by £20 per week.
This report presents analysis by CPAG, commissioned by Action for Children, on the importance of the £20 increase in mitigating the damage caused by social security losses over the previous decade for a typical working family.