• The end of the £20 uplift to Universal Credit and Working Tax Credit in October 2021 has the potential to further widen health inequalities and leave some areas further behind the average for living standards. 
  • Areas with a higher proportion of the population receiving Universal Credit or Working Tax Credit also tend to have lower healthy life expectancy. 
  • The average loss to income for working age families in the 10% of local authorities with the worst health will be almost the twice the loss to those in the 10% of areas with the best health (£207 per year in the 10% of areas with the worst health compared to £105 per year in areas with the best health).

The government increased Universal Credit and Working Tax Credit by £20 per week in March 2020 providing greater income support for lower income families during the pandemic. The temporary increase, extended by six months, is now set to end in October 2021. Many people and organisations across civil society have criticised the end of this uplift. A letter signed by the Health Foundation notes that this will increase poverty, harm the prospects for levelling up and widen health inequalities.

The above chart shows that there is a strong relationship between health and the proportion of the working-age population receiving Universal Credit or Working Tax Credit in local areas.

Areas with lower healthy life expectancy also tend to have a higher proportion of the working-age population receiving Universal Credit or Working Tax Credit. This means that areas that already have the lowest healthy life expectancy will experience a greater overall reduction in income when the uplift comes to an end, potentially making existing inequalities worse.

The average loss to income for working age families in the 10% of local authorities with the worst health will be almost the twice the loss to those in the 10% of areas with the best health (£207 per year in the 10% of areas with the worst health compared to £105 per year in areas with the best health).

Looking at it the other way, the 10% of councils with the greatest share of the working age population in receipt of Universal Credit and therefore set to experience the greatest overall reduction in income if the uplift ends have an average life expectancy of 59.8 years, which is 7.8 years lower than 67.6 years in the areas least affected.

As explored in our long read on how money and resources affect health, living on a low income can lead to worse health by constraining options and acting as a source of stress. There is also evidence that previous cuts to benefits in the UK have contributed to worse mental health.

Ending the uplift to Universal Credit and Working Tax Credit will have a greater impact on income in areas with the worst health, making it harder to ‘level up’ differences in health across the UK and leave some areas further behind the average for living standards.

 

Technical note

Universal Credit household data using family type is used to estimate the number of adults receiving Universal Credit in each area. For Working Tax Credit, the national average for family type is used to estimate the number of adults in receipt. For the analysis on this page, the reduction in Working Tax Credit uplift is treated on the same basis as Universal Credit for comparability, though it was paid as a lump sum entitlement rather than as part of a regular monthly entitlement.

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