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Research paper: Making Work Pay in London under Universal Credit

  • By London Councils

Single parents and families with two or more children in London who are starting work are likely to be worse off from an overhaul of the benefits system, according to research commissioned by London Councils, available from related documents (right).

Also available is a spreadsheet containing all the relevant data.

Research topics:

  • the impact of work incentives within Universal Credit on Londoners
  • whether work incentives are the same for both Londoners and the rest of the UK
  • whether Londoners are equally better or worse off than the rest of the UK under Universal Credit following its introduction in 2013.

Main findings:

  • a significant number of households will be financially worse off under Universal Credit than under the current scheme – mainly single parents and families with two or more children
  • under Universal Credit, all benefit households in London will have less spending power than their equivalents in the rest of the UK
  • some families will be worse off if they increase the number of hours they work
  • these adverse impacts are because London’s higher childcare and housing costs are not being adequately reflected within the benefit design.

Recommendations:

  • childcare support should vary according to childcare costs in the area and include wrap-around and holiday support
  • either the cap for London as a whole as a whole be raised or the housing element of the cap for London is raised.