Universal credit: what needs to change

Post date: 
05 June 2019

Universal credit: what needs to change to reduce child poverty and make it fit for families? calls for design and funding changes to improve claimants’ experience of universal credit and to reduce child poverty. It includes new analysis by IPPR which finds: 

  • A modest package of re-investment in children’s benefits would lift 700,000 children out of poverty by 2023, when universal credit will be fully rolled out, and increase family income by an average of £1,000 per year.
  • Restoring both the child element in universal credit and child benefit to their 2013/14 value would mean 200,000 fewer children in poverty.
  • 300,000 fewer children would be in poverty if the two-child limit in universal credit were scrapped. Of all the changes modelled in the report, this would lift the most children from poverty per pound of social security spending.
  • 400,000 out of 500,000 children in families affected by the benefit cap are living so far below the poverty line that even lifting the cap would not be sufficient for them to escape poverty, although it would increase their income. Removing the benefit cap would however move 100,000 children out of deeper poverty (measured as living below 50% of median income). Fewer than 50,000 would escape poverty altogether if the cap were lifted as their incomes are so far below the poverty line.
  • Restoring all working-age benefits to their value in 2015-16 - when a four-year freeze began - would move 200,000 children out of poverty.   

The report also looks at various design problems within universal credit - we highlight the impact of these problems on families using cases we’ve collected through our Early Warning System - and at natural and managed migration.