Universal Credit will make most people worse off

A new report shows the effects of universal credit following other benefits changes which is unlikely to benefit most households.

Those worse affected are likely to be families, in particular those in poverty, and disabled workers.

The report published by Child Poverty Action Group (CPAG) and the TUC says that the new system will be severely undermined by the recent tax credit and benefit changes.

It states that although Universal Credit will improve some aspects of the benefits system, it is unlikely to lift families out of poverty or help remove barriers to working.

Even though these are part of the wider intentions of universal credit, they have been set back by the other changes that the government have made to benefits and tax credits.

'Universal Credit - Will It Work?' warns that the positive outcomes of the scheme has been overstated by ministers, and the main objectives are not likely to be achieved.

It is unlikely to reduce poverty, which is one of the main aims, as nine in ten families will gain nothing from its introduction, and the report calculates that any gains made are likely to be offset by the other changes.

Analysis by economist Howard Reed shows around 50% of households will see their income fall (compared to what they would have received under the benefit and tax credit system the government inherited).

On average, the second poorest group of households (those with incomes of £10,187) will lose over £500 by 2015 as a result of all the benefit changes including Universal Credit. And those in the fourth income group (with household incomes of around £16,010) will find themselves an average of £700 out of pocket (compared to the previous system).

Support Solutions