Almost two million people will lose £1,000 a year with UC

Those claiming disability benefits will be the worst affected, according to a new study.

universal credit

Eleven million adults will either gain or lose money under the Universal Credit (UC) system, a new study by the Institute for Fiscal Studies (IFS) concluded.

Self-employed workers on below average incomes and low-income families with little savings will also be among the biggest losers, with almost two million people losing out on more than £1,000 a year following the switch to UC.

Universal credit is a merger of several benefits previously paid to claimants separately, including housing benefit, child tax credit and jobs seekers allowance.

Last month, the annual Households Below Average Income (HBAI) report covering 2017-18 found that 3.7 million children were living in absolute poverty, up from 3.5 million in 2016-17.

As the government aims to complete one of the biggest overhauls of the benefits system since the introduction of tax credits in 2003, the report further reveals that those who are disabled or live with a disabled person are especially likely to be persistently, rather than temporarily, poor.

Under the system, the IFS reveal that out of the eleven million affected, about 4.2 million will be at least £100 per year better off than under the current system and 4.6 million will be at least £100 per year worse off after transitional protection expires.

Tom Waters, a research economist at the IFS said: “The biggest losses experienced because of the switch are mostly down to a small number of specific choices the government has made about universal credit’s design, such as its treatment of the low-income self-employed and people with financial assets.

“Many of those very large losses do turn out to be temporary for those concerned.

“However, even when measuring people’s incomes over relatively long periods, universal credit still hits the persistently poor the hardest on average.”

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