Gov benefit rates April 2025

FeistyPigeon

Quoting some of the comments J Rowntree made - this is what we should be hammering home to the government.

They want to get us back into work, but their policies are making that even harder + less likely:

A safety net that allows incomes to fall so low can throw up more barriers to work

When every day becomes an all-consuming battle to afford essentials and deal with the effects of hardship, it’s no wonder that this can add to problems and make it harder to secure work.

Universal Credit’s basic rate (and its equivalents in previous systems) is now at around its lowest ever level as a proportion of average earnings - at 13% - and the UK has some of the lowest income replacement rates amongst OECD countries (Bannister et al., 2023). This means many people experiencing sudden setbacks will find themselves in the incredibly difficult situation of being unable to pay bills and getting into debt to pay existing commitments. This can spiral and have knock-on consequences, including on someone’s ability to get back into work.

…inadequate income support can move people further from the labour market. This could be because it creates problems for people, such as deprivation, social exclusion or homelessness (Mcknight and Vaganay, 2016). For example, a pilot employment support intervention in Oxford found that the higher a person’s weekly housing benefit shortfall, the less likely they were to attain employment through the pilot (Oxford City Council, 2015).

Growing recognition that inadequate social security is creating barriers to work

The APPG on Poverty report concluded (APPG on Poverty, 2023): ‘The inadequate rates of benefits are counterproductive to the Government’s aim of getting more people into work.’

This mirrors conclusions being drawn elsewhere. Australia’s recently established Economic Inclusion Advisory Committee – set up to provide advice on economic inclusion, including the adequacy of benefits, before every Federal Budget - stated in their 2023 report: ‘It is our view that unemployment payments have fallen to such an inadequate level that they create a barrier to paid work. It is also our view that our income support system should prevent poverty and financial distress to ensure people looking for paid work are not placed at a greater disadvantage by virtue of not having enough money to meet the essentials of life.’

The Government should implement an Essentials Guarantee in Universal Credit

An Essentials Guarantee would embed in our social security system the widely supported principle that, at a minimum, Universal Credit should protect people from going without essentials. Developed in line with public attitude insights and focus groups, this policy would enshrine in legislation:

An independent process to regularly determine the Essentials Guarantee level, based on the cost of essentials (such as food, utilities, vital household items and travel) for the adults in a household (excluding rent and council tax). The independent process would draw on independent evidence, including from people with direct experience of living on a low inco

That Universal Credit’s standard allowance must at least meet this guaranteed level. (This should also apply to legacy benefits ahead of full Universal Credit rollout.

That deductions from Universal Credit (such as debt repayments to government, or as a result of the benefit cap) can never pull support below this guaranteed level.

Ultimately the level of the Essentials Guarantee would be recommended via the independent process, but the research indicates that in 2023/24 it would need to be at least around £120 a week for a single adult to cover the cost of essentials. Universal Credit’s standard allowance is currently £35 a week below that, leaving a significant gap.