A new research revealed that almost 2 million Brits are set to lose £1,000 per year in the switch to universal credit, with low-income families and disabled claimants being the ones who will be affected the hardest.
A study that was conducted by the Institute for Fiscal Studies (IFS) discovered that up to 1.6 million Brits will have gained £1,000 per year by mid-2024 when the benefit is fully rolled out – however, 1.9 million will lose at least this much.
According to the IFS briefing note that was published today, nearly a third (29 percent) of those in working rented households will be entitled to at least a grand more, accounting for any massive gains.
However, couples where one partner is above state pension age, self-employed low earners, those claiming disability benefits, and people who have financial assets greater than £6,000 will be £1,000 worse off per year, with 77 percent of those who lose this much belonging to one of these groups.
However, the institute said that the owner-occupiers, self-employed, and people who have significant financial assets are 1.5-2 times more likely than other low-income groups to declare themselves as only temporarily poor. Due to these changing circumstances, massive persistent gains or losses will be less common as compared to large temporary ones.
While 17 percent of those who are entitled to means-tested benefits will observe a £1,000 drop in their annual income in the short run, only 11 percent will notice a change that big to their longer-term incomes.
Initially, the low-earning self-employed are set to lose £2,100 per year, however, this will decline to £850 per year in the long run, as their incomes rise. The average loss for those with significant assets is approximately £1,430 in the short run and £420 in the long run.
The exception to this trend are those people who claim disability benefits. The IFS said that those who are disabled or live with a disabled person are especially expected to be persistently poor.
And its the poorest Brits who are set to lose the most proportionately, as those in the bottom 10 percent lose 1.9 percent of their income – equivalent to £150 per year per adult.