Keep the lifeline: why the Government should keep the £20 uplift to Universal Credit

The next few weeks, in the lead up to the Spring Budget, will be one of the most crucial moments for our social security system for many years. The Government has a choice:

• It can go ahead with a cut to the incomes of millions of families during the middle of a recession, catalysing the worrying poverty trends we have seen in the lead up to and during this crisis.
• Or, it can keep this lifeline in place, supporting families who need it through the rest of the crisis, the following period of high unemployment and our recovery, as well as ensuring we have an adequate social security system for the future.

We are urging the Government to make this much-needed £20 per week uplift to Universal Credit and Working Tax Credits permanent, and extend to legacy claimants so that this group, who are mainly disabled, sick and carers, don’t continue to be excluded.

Recommendations

1. The decision to increase Universal Credit (UC) and Working Tax Credit (WTC) by £20 per week was the right thing to do at the start of the pandemic and it is the right thing to do now. Rather than cutting families adrift in April, the Government should make the uplift to UC and WTC permanent and extend this same support to those on legacy benefits.
2. Our new estimates suggest that keeping this lifeline for families on UC/WTC will cost around £6.4 billion in 2021/22, and a further £1.9 billion to extend it to legacy benefits. The legacy benefit cost will fall over the coming years as most people on legacy benefits migrate to UC, but for families struggling to stay afloat, the need is urgent.