The UK’s inadequate and unfair safety net

January 2024

The UK has, in theory, an income safety net to ensure that nobody has too little income to subsist.

Universal Credit (UC) is supposed to provides a minimum monthly income for all working age adults and their children, provided that those able to work take steps to find employment.

Pension Credit provides a minimum income guarantee for those above state pension age.

The purpose of these benefits is to ensure that nobody has to be left without financial means; on this basis, some people are excluded because they have savings that they could draw on.

But for this to be called a safety net, it needs to be set at a level sufficient to meet people’s basic needs. No government has ever tested benefit levels against this criterion. For many years, rates that had originated in historic expenditure levels were assumed to represent a subsistence level, and uprated each year at least in line with inflation. Over the past decade, they have fallen in real terms, so even if in the past they just about met the most basic needs, this is no longer the case.

Today, we do not have a safety net worth its name. Four main characteristics of means-tested benefits for working-age adults contradict the idea that they provide the “safety” of a guaranteed income to avoid destitution.

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