The UK’s leading poverty charities have called for a change in the law to fix the UK’s “failing” welfare system after research revealed that basic benefits given to low-income households are at least £140 a month below the real cost of food, energy and everyday basics.
The Joseph Rowntree Foundation (JRF) and the food bank network the Trussell Trust said inadequate benefits were the main driver of the explosion in destitution and food bank use in recent months, and urged the government to formally bring universal credit rates into line with minimum living costs.
The JRF chief executive, Paul Kissack, said the “so-called” welfare safety net had floated completely free from the economic reality of people’s lives. “With millions of low-income households going without essentials like food and heating, and food bank use at record levels, it is plain the system is failing,” he said.
The two charities have calculated the weekly cost of a basic existence to be £120 for a single adult and £200 for a couple, based on a basket of goods and services including food, energy, travel, mobile phone and internet use, as well as smaller items such as toothpaste and washing-up liquid.
By comparison, even after April’s 10.1% benefits uprating, the universal credit standard allowance – the portion of the monthly benefit payment meant to cover basic living costs – will be £85 a week for a single adult aged over 25 (£35 less than the charities’ estimates) and £134 a week for a couple (a £66 gap).
The charities have been increasingly alarmed by the unprecedented scale and depth of poverty witnessed in food banks, warm rooms and advice agencies this winter. Millions of low-income households have been left unable to afford even bare essentials as the cost of energy and food has rocketed, leading to overstretched welfare emergency services and shocking examples of extreme hardship.
They say the cost of living crisis has exposed a disastrous long-term erosion of benefits, whose value has fallen to a 40-year low in real terms as a result of freezes and cuts. This has led to rampant food insecurity, children turning up at school hungry, and the phenomenon of disabled people risking their health because they cannot afford energy bills.
Kissack added: “It is time to build a system that is needs-tested – where the support people get is linked to the actual costs of essentials. A system where every family has enough money to get by, and as a nation we confine to history the scourge of people having to skip meals or switch off essential appliances just to get by.”
In reality, more than half of households on universal credit receive even less than the basic £85 rate because of monthly caps and benefit deductions amounting to hundreds of millions of pounds a year, the charities say. A single adult facing deductions would typically see their basic rate allowance drop from £85 to £64 a week.
The Trussell Trust chief executive, Emma Revie, said that even when its food banks helped vulnerable clients to claim their full benefit entitlements, in many cases their newly enhanced incomes still did not cover their basic living costs. “People have cut and cut, but you cannot budget if your budget isn’t enough,” she said.
The charities claim there is widespread public support for raising the basic level of benefits, having carried out polling that shows nearly three-quarters of the public agree rates of universal credit are too stingy. There was majority support for raising universal credit basic payments even among 2019 Conservative voters, of whom 62% backed an increase.
The cost of uprating benefits in line with the charities’ “essentials guarantee” means the idea may struggle to gain traction with the main political parties. It would cost £20bn a year, although the charities argue this would pull 1.7 million people including 600,000 children out of poverty, and over time would bring savings through lower NHS demand and other social benefits.
The two charities believe there is value in enshrining in law the principle that benefits are aligned with a robust, independent estimate of actual basic living costs. They say setting benefits has become primarily a political exercise out of touch with the reality of the lives of those who need to claim them.
Kissack said it was extraordinary that benefits had never been linked to the actual cost of low-income households’ basic needs. A political consensus was established two decades ago to protect basic pensioner living standards, and a similar settlement was now needed to support people of working age on low incomes, he said.
A government spokesperson said it believed that work was the best way to increase income. “We have consistently used inflation figures to uprate benefits, including in cases where benefits are increased beyond the inflation rate at the point at which the rise kicks in, as happened in 2012, 2015 and 2020,” they said.
“We are increasing benefits and the state pension by 10.1% in April but we recognise the pressures of the rising cost of living, which is why we will also be providing £1,350 of direct, targeted support to millions of vulnerable households in 2023-24. In addition, our household support fund continues to help people with essential costs.”
