For too long we have failed to ask hard questions about the state of Britain’s housing benefit system. Growth in the cost of housing benefits has been relentless – with a nearly 20% increase in spending projected over just 5 years – and costs set to reach £44 billion by the end of the decade.

We have not asked if this is fair. Fair to taxpayers, paying their own rents and mortgages. Fair to housing benefit claimants in the private rental sector, where the generosity of housing benefits seesaws unpredictably through freezes and uplifts, with no ability to plan. Or fair to families who really and often urgently need a stable roof over their heads, stuck on council waiting lists whilst high earners – and even some foreign nationals – benefit from lifetime tenancies. 

This excellent paper asks these fundamental questions. It makes a compelling case that so much of our housing benefit system is failing. It sets out a range of thoughtful proposals for how government can control costs and build a better, fairer system. As we do the hard work in opposition to plan our reforms to housing benefits, I welcome contributions like this that add to this vital debate. 

Fixing housing benefits and social housing is a difficult but essential challenge. We must ensure our housing stock and the benefits that fund it support those most in need and enable opportunity, rather than incentivising people to remain stuck in homes that hard-up taxpayers can ill-afford to subsidise. Yet the most urgent pressure is to grip the system and end the inexorable rises in spending that form a growing part of our ballooning welfare bill. This package is a compelling solution to that pressing problem.

Helen Whately

Shadow Secretary of State for Work & Pensions

Introduction

Housing is the largest single living expense that most families face. Many people work and save for years to own their home outright to be freed from high housing costs. But another group is also living rent-free, with their costs met by the state. One in five households in Britain have their housing costs covered at least in part by the benefits system, through Housing Benefit or the Universal Credit housing element.[1] This is equivalent to all the households in England’s nine largest cities combined.[2]

Paying the rent of over 5.75 million households a year comes with a heavy price – one that is rising fast. Official forecasts suggest that by the end of the decade, the cost of housing benefits will be more than double the cost in 2018.[3] Even this alarming trajectory is severely under-pricing recent and upcoming policy decisions which will accelerate costs further. By the end of the next parliament, core housing benefits spending could exceed £52 billion, up from £30 billion today.[4]

This paper reveals that the current estimates for future housing welfare spending are implausibly low and builds a more realistic baseline for spending in the private and social rented sectors for households without additional housing support needs. It then looks at how this higher projected spending can be brought under greater control quickly and without the need for new primary legislation, saving £4.5 billion a year by the end of the next parliament in 2033/34.

Without the usual price signals that drive other renters to choose carefully a home in the right location they can afford, the benefits system creates an array of perverse incentives for claimants that are neither in their best interests, nor in taxpayers’. As well as addressing the unsustainability of housing benefits spending, this paper also considers ways to correct some of the underlying unfairness to those paying for both their own housing and their neighbours’.

Home truths

Housing benefits are paid by the Universal Credit (UC) housing element to most working age claimants or by Housing Benefit (HB) to pension age claimants, those with additional housing support needs and those still on legacy working age benefits.[5] These benefits are paid on different terms to those in the private rented sector and those in the social rented sector, creating a series of perverse incentives:

1. Geographic generosity – Claimants in the private rented sector can choose to live in more expensive areas and receive a higher value subsidy from the taxpayer to do so. Rates paid for housing benefits in the private rented sector are set based on the distribution of local market rents. In the social rented sector, properties are allocated via local lists that provide well below-market rents, which housing benefits can cover in full, linked to the shape of the property and labour market in 1999. 

2. Tenure security – Social housing is awarded based on an assessment of need at a particular point in time. A majority of social tenancies are awarded on a lifetime basis, even if the occupants no longer meet the allocation rules or are no longer eligible for housing benefits at all. Lifetime security at a highly subsidised rent creates an incentive to gain priority on local housing lists through crisis, often via statutory homelessness duties and temporary accommodation, which are the route to 28% of new social lettings.[6]

3. Labour mobility – Social housing allocation policies reward those with a continuous record of residence in the area. Local connection tests advantage those who stay within a council area, even if moving elsewhere may help to find work. While there is some incentive to earn enough to be exempted from the benefit cap, there is a stronger incentive to claim incapacity and disability benefits in order to be exempted from the cap if housing benefits do not fully cover rent.

The dynamics governing how claimants respond to housing benefits policy sit both within the housing benefits themselves, and in the wider structure of the benefit system and local government. This paper focuses on measures possible within allowances and rent-setting that could be implemented immediately at the start of a new parliament in 2029/30, without changing allocation policies, work conditionality, tenancy terms or other benefit eligibility.

With so many reasons to stay dependent on the welfare state or choose more expensive areas from which to draw housing benefits, the impact on the public finances should be no surprise. The latest 2026 Spring Forecast indicates that housing benefits spending will be the same proportion of welfare spending this financial year as it was in 2010/11 at 10.9%.[7] Against a much larger overall welfare bill, this stubborn constancy in share is concerning, especially as housing benefits were an area of spending restraint through much of the intervening period. 

After a period of cutting, capping and freezing affecting both tenures in the 2010s, housing benefits spending dipped to £20.7 billion by 2018/19. This was followed by two sharp increases when allowances were restored to the 30th percentile of local market rents in 2020 and again in 2024. In the current financial year, £38.8 billion is forecast to be spent on housing benefits.[8] By 2030/31, this is expected to exceed £43.5 billion – more than double the cost in 2010/11 or 2018/19.

Figure 1 – Housing benefits spending, 2010/11-2030/31

Source: DWP, Benefit expenditure and caseload tables 2026[9]

The increase across the forecast period shows that, even with an assumed continuation of the private rented sector freeze, there is no sign that spending will start to come down as it did during the freeze in the latter half of the 2010s. Likewise, in the social rented sector forecast, the increase in permitted social rent rises in the latest Rent Settlement will add an average of £300 million a year to housing benefits spending.[10] Even with the private rented sector freeze in place, total spending continues to rise sharply.

The deeper problem with this already bleak forecast for the public finances is that it does not even begin to capture the true extent of likely housing benefits growth within the forecast period and beyond. The section that follows explains why the forecast is implausible and seeks to build a more likely baseline from which savings from policy changes can then be measured.

Thawing private rented sector support

The forecast assumes that the current freeze in Local Housing Allowance (LHA) rates that keeps rates at 2024/25 levels will continue at least until 2030/31. This is based on the 2026 Spring Forecast stating that LHA rates will remain frozen until at least March 2027.[11] The OBR simply takes the current policy and has no choice but to assume it continues, absent an affirmative policy decision beyond next March. To understand why the freeze being renewed in the next financial year is highly improbable, it is first necessary to understand how LHA rates are set in policy and legal terms.

LHA rates are the maximum weekly rate of housing benefits claimants in the private rented sector can receive. Claimant households receive benefits for the full amount of their rent if it is lower than this rate, or part of their rent up to this maximum. Households may receive less after their rate has been applied, such as if their total benefit award exceeds the benefit cap or if they have savings above certain thresholds. There are also national caps that apply to LHA rates in the most expensive areas.

The rate applied depends on which area a claimant lives in, known as the Broad Rental Market Area (BRMA), and the bedroom eligibility of the household. Size criteria for LHA rates usually allow one bedroom for each of the following: a couple; any other person aged 16 or over; two children of the same sex; two children under 10 regardless of sex; and any other child. Eligibility is capped at four bedrooms however large the household. A single claimant under 35 with no dependants is limited to the shared accommodation rate (the rate for a room in a shared house) rather than the one-bedroom rate, subject to exemptions for disability or vulnerability.

There are 192 BRMAs in Great Britain, varying in size and population. In England, rates are calculated by Valuation Office Rent Officers collecting a sample of rental information from letting agents, landlords and tenants about private market rents each year. In Wales, they are set by Rent Officers Wales and in Scotland by the Rent Service Scotland via a similar process. From these lists of rents, Rent Officers are bound by legislation to calculate the 30th percentile of local rents for each BRMA.[12] Secondary legislation is then laid each year for which a freeze is applied to override this policy.[13] These negative instruments can be “prayed against” in the House of Commons or the House of Lords, which can lead to debate on the issue. The statutory default remains to uplift rates to the 30th percentile in each area each year, not a continuous freeze.

Second, the current freeze has already eroded the value of LHA rates significantly, making even one further year of freeze difficult for the government to sustain. Shortly after the last uplift to the 30th percentile in 2024, 45.6% of private resented sector households on UC with a housing element were subject to an LHA rate that did not fully cover their rent.[14] In the latest month for which information is available, shortfalls stand at 58.2%. By April 2027, the number of claimant households with shortfalls is on course to have well exceeded the number with shortfalls directly before the last LHA rate uplift to the 30th percentile, and has likely surpassed one million already.[15]

Already, the size of the gap between LHA rates and the affordability of tenancies is significant. In 2026/27, out of the 960 different BRMAs and bedroom categories, 34% already have frozen LHA rates that are lower than the 10th percentile of local market rents in that year.[16] In the next financial year when the freeze or uplift decision comes, this is likely to exceed 55% of areas and bedroom categories, based on the ten-year average of ONS price index of private rents (PIPR).[17] By 2030/31, 95% are likely to be below the 10th percentile.

The extent of the shortfall between the default 30th percentile and a continuation of the LHA freeze at 2024/25 rates into next year is acute. The gap between the likely 30th percentile of market rents for 2027/28 and a continued freeze of LHA rates will leave an average shortfall of around £156 per month. For larger properties, the gap is even more cavernous, with four-bedroom frozen LHA rates an average of £241 per month below the 30th percentile. Even in the BRMAs with the median shortfall across all bedroom categories – Wigan and Barrow-in-Furness – the gap is around £135 per month. For claimant households, these mounting gaps represent a significant share of their total awards, making it difficult to bridge the shortfall from other parts of their benefits awards.

Claimants who entered private rented sector tenancies that were at or above the LHA rate at the 30th percentile in 2024 will likely have experienced a profound erosion in what their housing benefits cover. They would not have known when taking on the tenancy that their housing award would remain frozen for years afterwards as their rent increased. Tenants cannot make long-term decisions about which properties and areas are affordable for their family circumstances, including for sustaining employment, if housing benefits rates see-saw between generous leaps and punitive freezes at unpredictable intervals.

Figure 2 – Average monthly difference between 30th percentile and frozen LHA rates in 2027/28

Source: Onward analysis, MHCLG, Welsh Government, Scottish Government and ONS PIPR data[18]

Third and finally, there is the political likelihood of the freeze continuing into next year or longer. The current freeze has held LHA rates at the same cash level for three years already. If it continues into next year, it will be on par with the 2020/21 to 2023/24 freeze and one year off the 2016/17 to 2019/20 freeze.[19] Continuing to 2030/31, as per the OBR forecast assumption, would be the longest LHA freeze ever. Given how fiercely these long freezes were opposed by those now on the government side, it will be increasingly challenging to maintain discipline in support of this position.

The likelihood of the Government supporting another year of a freeze is reduced by the fact that Labour’s original LHA rates were far more generous than the 30th percentile. When LHA rates were introduced during the last Labour Government, they were set at the 50th percentile (median rent). In addition, if tenants chose tenancies with rents below the median, they were allowed to keep up to £15 per week of the cash difference to encourage them to choose cheaper properties than the maximum and avoid rent inflation up to the median. Claimants could also be eligible to claim for up to five bedrooms, rather than four. The case for reverting to these policy positions was made vociferously by opposition parties during the coalition and Conservative governments.

This historic position has not been forgotten. Ahead of the decision to freeze LHA rates last year, the then Labour Chair of the Housing, Communities and Local Government Select Committee, Florence Eshalomi MP, lent her support to a coalition of forty organisations calling on the government to restore LHA rates to at least the 30th percentile and to assess the impact of returning to the median.[20] She is now a Minister of State in MHCLG. Early Day Motions were signed by Labour, Liberal Democrat, Green and Plaid Cymru MPs calling for LHA rates to be restored to the median.[21] The chorus of stakeholders calling for an end to the freeze has only become louder this year.[22]

The Prime Minister himself has repeatedly referred to the damaging impact of LHA freezes and the need for regular uplifts. In a major speech as the candidate to become the Labour leader in June 2026, three weeks before becoming Prime Minister, Andy Burnham stated:

“We are forced to chase rents in the private-rented sector through the benefits system. When governments try to control these costs by freezing Local Housing Allowance, it makes families homeless and places unfunded pressures on councils when they have to pay for temporary accommodation.”[23]

This landmark speech is consistent with his earlier calls for ending the freeze to reflect rental market conditions. A fortnight before the November 2025 Budget, while Mayor of Greater Manchester, he called for “restoring LHA to reflect real rental costs,” although he fell short of specifying whether this means median rents or another market link.[24] When the previous uplift to the 30th percentile was announced in the 2023 Autumn Statement, he issued a press release saying, “one of our biggest calls has been the urgent need to unfreeze Local Housing Allowance and I am pleased that the Chancellor has listened.”[25]

Recent Resolution Foundation analysis casts doubt on the Prime Minister’s claim about benefits chasing, or driving up, rents in the private rented sector. Findings indicate that only around 10p in every pound of uplift was fed through to higher rents at the bottom of the market after the April 2024 uplift.[26] This means the Prime Minister has less need to avoid the uplift out of a principled aversion to passing on the increase to private landlords.

Against this legislative, affordability and political backdrop, it is highly improbable that a freeze will continue into the next financial year, let alone through to the end of 2030/31 as the Spring Forecast assumes. This context is consequential for any incoming government after the next election. Housing benefits spending will almost inevitably be materially higher than is expected currently – and the imperative to exert spending restraint will be overwhelming. 

Resetting the private rented sector baseline

This paper models a plausible baseline for private rented sector housing benefits spending: it assumes that LHA rates are uplifted to the 30th percentile each year from 2027/28, in line with the legislative default. A list of the key assumptions is given below.

Figure 3 – Private rented sector baselines

Source: Onward analysis, DWP outturn and forecast, Spring 2026[27]

Assumption 1 – Distribution of rents

To create this baseline, the model analyses the latest Valuation Office lists of local market rents, known as the Shadow List of Rents, and the devolved equivalents, to commence with the latest snapshot of the distribution of market rents by BRMA on the same basis that LHA rates are set.[28]

Assumption 2 – Rent growth

The model then applies the ten-year average growth rate from the ONS’s PIPR to estimate how rents rise until the end of the next parliament in 2033/34.[29] At a national level, the compound annual growth rate is 3.81%. This aligns with the latest PIPR, which shows average UK monthly private rent increased by 3.8% in the 12 months to August 2026.[30] If more recent multi-year compound annual average growth rates were used, such as three or five years, the rate would be materially higher, at around 6% nationally. A ten-year average is used to avoid embedding distortion from the period following the Covid-19 pandemic when rents surged and to avoid possible local anomalies from taking single year values alone.

Assumption 3 – Caseload shares by bedroom rate

In order to model how many claimants are eligible for different LHA rates, it is necessary to estimate the proportions of claimants in each BRMA and each bedroom rate. For example, some areas will attract a higher proportion of younger claimants only eligible for the shared accommodation rate, whereas others will have more family homes at the lower end of the rental market and therefore attract a higher proportion eligible for three- and four-bedroom rates.

As UC household caseload data does not split by bedroom category, nor gives sufficient detail on household characteristics from which to estimate this, bedroom level caseload proportions applied for each BRMA are based on bedroom category proportions from 2018 Housing Benefit caseload data. While this is lagged, it is the last year before managed migration to UC began, giving the most up to date and reasonably complete picture of the general shape of the entire caseload by eligible bedrooms in each area.[31] At a national level, just over two thirds of the caseload were eligible for one or two bedroom rates, with the rest split between three bedrooms, the shared accommodation rate and four-bedroom rates in descending order of proportion.

Figure 4 – National share of private rented sector caseload by bedroom eligibility, April 2018

Source: Onward analysis, DWP Stat-Xplore[32]

Assumption 4 – Caseload growth

Next, the model assesses how much the caseload is likely to grow in each BRMA across the seven year time horizon, against which the bedroom shares for that area are applied. Caseload growth rates are calculated from the compound annual growth rate in caseload across those receiving housing benefits through UC and HB in each BRMA since April 2018.[33] Extreme outliers in caseload growth are capped to ensure that the total growth remains in line with the overall national rate.

Assumption 5 – Average award

There is no published breakdown of the amount of UC award claimants receive from just the housing element, let alone by each BRMA and for each bedroom category. Again, the model relies on HB, taking the latest month for which data is available for each LA (then converted to BRMA) and each bedroom category.[34] This is then calibrated against the 2026 Spring Forecast, which gives the only breakdown of how much is spent in total on UC housing element in the private rented sector as a separate component within awards to combine with private rented sector HB awards.[35]

Assumption 6 – Rent less than LHA adjustment

To reflect that housing benefits in the private rented sector pay the lower of LHA rates and rent, an adjustment factor is modelled to give an implied pass through of any change in rate. Claimants who already have a shortfall between their LHA rate and rent stand to benefit from a rate rise to the 30th percentile, whereas those for whom the frozen LHA rates still cover their rent will see no change from an uplift.

Those with rents that sit somewhere between the old LHA rate and the new one will gain part of the uplift amount. The model considers the number of claimants in each BRMA that have rents above the previous year’s LHA rate, the gap between old and new LHA rate and where rents are likely to sit between the old and new rates according to the local rent growth rate. At a national level, the model estimates a pass through to benefits of 56.3%.[36]

Social renting like it’s 1999

The UK still has one of the largest social rented sectors in Europe as a proportion of total dwellings, despite the stock declining steadily since the 1980s.[37] There are around 3.4 million homes for general needs social rent, and a further 400,000 for general needs affordable rent.[38] The almost three quarters of the sector that comprises general needs social rent is governed by a jumble of archaic rent policies, tied to the shape of the labour and property market in 1999.

Before the millennium, there was no single basis for setting social rents, with a series of policy changes through the 1970s and 80s having led to wide rent variation between both council housing and housing association tenants, as well as between newer tenants and longstanding ones. From 2002, a new rent-setting policy was introduced, called formula rent, which was meant to provide a single basis for the vast majority of social rents after a ten-year period of gradual adjustment.

The basic input values and caps for formula rent are based on 1999 figures, including individual property values, manual worker earnings and rent distributions from properties of different sizes. This snapshot means formula rent is comparatively lower than market rents in London, while it over-values rents in other areas that have experienced decline.

After a long period of social rent cuts and caps from 2015, only around a quarter of eligible social tenancies have converged up to formula rent. Just 0.1% of local authority social rents and 43% of private registered provider social rents have arrived at formula rent.[39] Lack of progress towards a single social rent-setting basis means that social rents and their associated housing benefits costs are still determined by a mismatch of legacy inputs. There are also discrepancies between housing benefits in the social rented sector and the private rented sector in how bedrooms are weighted in rent calculations, with more generous allowances for very large homes in the social rented sector compared to four in the private rented sector.

Soon after the 2024 general election, the new government consulted on changes to social rent policies. However, it declined to re-open the underlying basis of formula rent, citing a need to move quickly and avoid instability or uncertainty in the sector.[40] Instead, the scope was limited to the annual uprating basis (and some minor technical amendments).

In January 2026, the Government confirmed that convergence would resume over a ten-year period, stepping up to £1/week from April 2027, rising to £2/week from April 2028 onwards, on top of CPI+1%.[41] Social rents above formula rent and affordable rents can increase by CPI+1% only. Accelerating towards a rent goal linked indelibly to a formula based in conditions over a quarter of a century old will further embed distortion in the sector.

Splitting the social rented sector baseline

The array of different stock types, rent-setting bases and benefit eligibility means the trajectory of housing benefits in the social rented sector is far more complex to project into the future than the private rented sector. The Spring 2026 forecast for housing benefits in the social rented sector captures a reasonable baseline for this tenure type to 2030/31 in Great Britain. Crucially, it includes a significant policy change announced in January 2026, which will accelerate English social rent increases across the period, beyond the usual CPI+1%.[42]

Figure 5 – Social rented sector tenures and benefit eligibility

Housing benefits awards are a reserved matter, but rent setting policies are devolved. To assess the impact of the social rented sector rent policies discussed in this paper, it is therefore necessary to model a more limited baseline than the Spring 2026 forecast to exclude Scotland and Wales, service charges, supported housing (and the associated intensive housing management costs, or IHM) and temporary accommodation costs paid by DWP.

This paper’s baseline therefore only includes general needs social rented sector claimants in England whose rent type is social rent (excluding eligible service charges) or affordable rents. The starting difference in baselines between the 2026 Spring Forecast for the relevant combined categories and the modelled baseline is therefore largely down to service charges being excluded in the model. By 2030/31 the modelled baseline moves above the Spring 2026 forecast baseline due to more recent higher-than-expected inflation forecasts used for uprating purposes.[43]

Figure 6 – England general needs social rented sector baselines

Source: Onward analysis, DWP outturn and forecast, Spring 2026[44]

Assumption 1 – Stock splits

Stock, tenure and average rents by local authority and bedroom size come from the Regulator of Social Housing’s 2025 statistical data returns for private registered providers (PRPs) and local authority registered providers (LARPs).[45] The model calculates formula rent for each authority and bedroom size according to the methodology in the 2026 policy statement on rents for social housing and January 1999 property values.[46] It calibrates this to the Regulator’s published formula rents and compares it with actual rents. Homes below formula rent are treated as still converging.

Assumption 2 – Turnover and rent paths

Each April, social rents can rise by the previous September’s CPI+1%. For social rent, the different rent policies are applied for those above formula rent or still converging up to it across the period according to the 2026 Rent Settlement terms. Estimated turnover is calculated from official social housing lettings data, showing a national churn rate of 4.97% per year.[47] In line with modelling from the Chartered Institute of Housing, the National Housing Federation and others, it is assumed that providers re-let vacant properties at formula rent.[48] Affordable rent is modelled using the Shadow List of Rents for local market rent data with CPI+1% applied.[49] Both paths use the latest CPI forecasts compiled by HMT or 2% for beyond that horizon (for 2029 uprating onwards).[50]

Assumption 3 – Stock growth

A new Social and Affordable Homes Programme was introduced in 2026, shifting the priority towards social rent homes.[51] Previous local stock growth rates are measured from the Regulator of Social Housing stock data between 2020 and 2025.[52] These rates are then scaled down for affordable rent and up for social rent to reflect the new planned tenure mix. While the new Prime Minister has indicated that he will expand social rent building further, there are not yet details sufficient to quantify this.

Assumption 4 – Housing benefits factor

As rents change, not all of this feeds through into housing benefits awards, because some tenants are not claimants and some claimants have deductions from their awards (such as the under-occupation deduction or the benefit cap). The draft Impact Assessment for the 2026 rent convergence policy notes that social security impacts are calculated as two thirds of the change in rental income.[53] This factor is applied to the model to scale the pass through to benefits of rent changes.

Going through the roof

By combining the private and social rented sector baselines, a substantial underestimation of the likely cost of housing benefits is revealed. By the end of the forecast period in 2030/31, spending on housing benefits in the private rented sector and the general needs social rented sector is set to exceed £40 billion, around £7.6 billion higher than the 2026 Spring Forecast indicates. By the end of the next parliament in 2033/34, it is on course to have more than doubled since 2023/24 if the likely private rented sector uplift occurs. 

Figure 7 – Combined baseline

Source: Onward analysis

Savings options

The policy options in this package are costed against the combined baseline above, using the same underlying basis from which to build the new policy scenarios. It is assumed that they are introduced at the start of a new parliament in the financial year 2029/30 and implemented over the five-year period to the end of 2033/34.

Recommendation 1: Uplift LHA rates to the 10th percentile each year.

Rates move from the 30th to the 10th percentile of local market rents and are uplifted to the 10th percentile every April thereafter. Existing claimants receive transitional protection that keeps their rate frozen in cash terms from 2029 until the yearly uplift to the 10th percentile overtakes it, or a new tenancy is signed. Claimants above state pension age may claim up to the 30th percentile.

The constant freezing and sporadic uplifting of rates to the 30th percentile is bad for tenants and taxpayers alike. The arbitrary and compounding impact of freezes on claimants, as demonstrated above, shows why this is a particularly regrettable way to achieve spending restraint. If LHA rates remain frozen in cash terms in line with the OBR forecast, they will erode to implausibly low rates, leaving many claimants exposed to growing shortfalls if they remain in their current tenancies or unable to find a property in a given area at all.

As the modelled baseline highlights, the 30th percentile is clearly an unaffordable long-term basis for uplifting housing benefits, and could see the total housing benefits bill quadruple from current levels by 2040 as the caseload continues to grow.[54] It is equally unfair to those who are not reliant on benefits to be priced out of some parts of the country while those on benefits can choose to live in more expensive areas and be subsidised to access effectively a third of the housing market there.

Shifting permanently down to subsidise only up to the bottom tenth of the market in each area is both fairer and more affordable for the government. To prevent further volatility for claimants who are already assumed to have seen LHA rates uplifted to the 30th percentile from 2027/28, a grandfathering arrangement is proposed. Existing claimants in the private rented sector would have their housing benefits awards frozen going into 2029/30 and held in cash terms until the yearly uplift to the 10th percentile overtakes their award. In areas with high local market rent growth rates, this protection will erode faster than in areas with slower growth.

Figure 8 – Mean year for 10th percentile overtake of frozen 2028/29 30th percentile LHA rates

Source: Onward analysis[55]

New claimants or those taking on a new tenancy are only eligible for the 10th percentile LHA rate, calculated on the same basis as the baseline. Claimants above State Pension age, who are less able to adjust their income and outgoings, remain able to claim up to the 30th percentile throughout the period. Over a five year period from 2029/30 to 2033/34, this recommendation is estimated to save a cumulative £6.9 billion. In 2033/34, the in-year saving reaches £1.9 billion. 

Figure 9 – 10th percentile LHA rate policy savings

Source: Onward analysis

Recommendation 2: Extend LHA rate-based caps to the general needs social rented sector

Eligible rent is capped at 10th percentile LHA rates for general needs social and affordable rent tenancies. Existing claimants have a maximum cash loss of £10 a week for the duration of that tenancy.[56] Pensioners are exempted from the cap.

Claimants in the social rented sector receive high effective subsidies from the state when compared to the full rental market value of the properties they are occupying. On top of this, there is no LHA-style maximum on eligible rent, so housing benefits can exceed private rented sector rates for that area. There is no equivalent to the shared accommodation rate for under 35s in the social rented sector. Extending 10th percentile LHA rates into the social rented sector as a cap on eligible rent creates a single, consistent maximum.

Eligible rent is currently set on a property basis rather than by household characteristics. This means that this policy would act as an additional underoccupancy penalty for those with rents hitting the LHA maximum. Almost a fifth (18.1%) of general needs social rented sector claimant households have one or more spare bedrooms.[57] As with the private rented sector, pensioners are exempted as they will be less able to adjust to this change in circumstances by increasing their income to cover any shortfall. To protect any claimants at the LHA maximum from sudden losses of housing benefits, a further cap is proposed to limit the weekly deduction to £10 per week.

Bringing LHA rates into the social rented sector was proposed previously at the Spending Review in 2015, but never took effect. According to analysis from the National Housing Federation, 18.2% of eligible households were expected to be affected by the cap.[58] A principal reason for this policy’s downfall last time was the inclusion of supported housing, which this recommendation excludes. As social rents have since been held low for so long, this policy only affects a much smaller proportion of total social rented sector properties, predominantly affordable rent tenants.

In 2029/30 when this policy is proposed to be introduced, just over 207,000 social and affordable rent homes are estimated to exceed a 10th percentile cap.[59] This is much lower than estimates for the 2015 cap, which was expected to affect around 800,000 homes in the long run.[60] Just over a third of those estimated to be impacted if this were introduced in 2029/30 are social rent properties, with the majority being affordable rent where the rents can be set up to 80% of market rents. In practice, many providers already use LHA rates as a guide for the maximum affordable rent to charge by number of bedrooms in the house, which is why the cap affects so few claimant households.[61]

As LHA rates only allow claims for up to four bedrooms, those with five or more bedrooms in the social and affordable rent sector would not be eligible to claim higher rates that account for additional bedrooms. There are around 12,500 social and affordable rent homes with five or more bedrooms, or around 0.34% of the total general needs stock.[62] There are only expected to be around 700 homes facing a further reduction at the cap due to having more bedrooms than they are eligible for under LHA rates.

The shared accommodation rate would impact those in the general needs social rented sector who are living alone and under 35 in the small number of areas hitting the LHA cap. As with the private rented sector, exemptions from the shared accommodation rate for disability and vulnerability would apply here too. The 2021 Census indicates that there are just under 89,500 households in England, or 2.1% of social rented sector households, with one resident under 35 with no disability or long-term health condition.[63] 44% of these households are also recorded as not in employment.[64]

Some of these single under 35s will be in supported housing or would be exempt from the shared accommodation rate by vulnerability criteria, such as being a care leaver under 25, a victim of domestic abuse or a former homeless hostel resident. As there is no equivalent to shared accommodation in the general needs social rented sector, the small number affected would need to move into the private rented sector if they cannot afford the shortfall, freeing up a one bedroom property for a couple or tenants over 35. 

This policy saves between £42 million and £45 million a year between 2029/30 and 2033/34. As this recommendation interacts with savings from Recommendation 3, these savings should not be summed and the total savings are given below.

Recommendation 3: Freeze rents in the social rented sector for five years.

Social and affordable rents are held at their 2028/29 cash level until 2033/34 while a new rent-setting basis is developed.

The basis for setting and uprating social rent is highly distorted. It is providing unreasonable effective subsidies to millions of tenants while private renters not on housing benefits are squeezed out of many desirable areas. Racing stock that sits below formula rent towards a calculation tied to 1999 does not to fix the underlying system for determining the value of social homes. As demonstrated by Recommendation 2, affordable rent is also distortionary, providing relatively generous rent levels in some areas compared to the local market.

As the consultation for the 2026 rent settlement acknowledged, preparing an entirely new system for rent-setting requires time for providers to adapt. It remains to be seen what the detail of the proposed devolution settlements will entail too, which could radically alter the structure of council responsibilities by 2029/30. Amidst this uncertainty, there remains a central fiscal imperative: to bring down the cost of welfare. As bringing LHA caps into the social rented sector is not enough to make significant savings on its own, a further step is proposed. A rent freeze should be brought in during the next parliament, while a new long-term rent-setting system is devised.

In addition to welfare savings, it is relevant to account for the loss of revenue to local authorities in the form of rent. The final saving is therefore given in public sector net borrowing terms, in line with the 2015 HMT assessment of the rent cut which includes this as a behavioural effect.[65] Housing associations were reclassified into the public sector in 2015 and then back into private sector classification from 2017, so they are not included in offset accounting.

Providers previously absorbed a 1% rent cut for four years from 2016/17 to 2019/20. The financial position of providers going into a freeze from 2029/30 is uncertain. The latest published forecasts from the Regulator of Social Housing do not include the 2026 Rent Settlement changes for convergence. There are also a number of new legal requirements on property standards and safety that increase costs to providers.

For local authority providers, previous analysis from Savills for the Local Government Association projects that a ten-year rent convergence policy would put Housing Revenue Accounts into a cumulative revenue surplus after around nine years and overall surplus (including borrowing for capital needs) after 30 years, while CPI alone deepens deficits.[66] A freeze from 2029/30 would arrive two years into convergence, before many HRAs are likely to have reached cumulative revenue surplus. The Regulator of Social Housing judged the majority of private registered providers to be financially robust in 2025, prior to convergence increasing their revenue.[67] Pre-convergence forecasts for private registered providers suggest that interest cover was due to go from 89.9% in 2026 to 118.8% in 2030.[68]

In recognition that the financial position of providers would deteriorate during a freeze, it is limited to five years while a new rent-setting basis can replace it that does not chase the outdated formula. There are existing hardship measures that allow an exemption where complying would jeopardise a provider’s viability.[69] Providers are also allowed to set rents for households with incomes above £60,000 at full market rent, so at least some of the windfall for non-claimant social tenants can be recouped.

Recommendations 2 and 3 interact with each other, as the rent freeze reduces the number of households subject to LHA caps as they are uplifted each year. Together, they are expected to save £7.5 billion by 2033/34, net of LA revenue loss. In 2033/34, the in-year saving reaches £2.5 billion. In addition to Recommendation 1, the three policies save a total of £14.4 billion over the five years, and an in-year saving of £4.5 billion in 2033/34.

Figure 10 – Total savings from recommendations 1, 2 and 3

Source: Onward analysis

Recommendation 4: Update national LHA caps to a 10th percentile-linked rate.

Update the national LHA rate caps to uplift with the 10th percentile of the highest outer London BRMA, plus 20%.

There are national caps on LHA rates which limit rates in more expensive areas where market rents are highest. When these were introduced in the 2010 Budget, they were based on the principle that those on benefits should not be able to live in areas that were out of reach to many people in work. Recent implementation of the caps has followed the 30th percentile rent of the highest outer London BRMA, plus 20%.[70] Current caps have been in place since 2024/25 and have likewise been frozen since. The shared accommodation rate national cap is the same as the one bedroom rate cap.

As LHA rates are moved to the 10th percentile, the national caps should also reflect the 10th percentile to remain in step. This prevents inner London LHA rates from becoming more generous in relative terms over the period. The current national cap policy is assumed to continue uprating with the 30th percentile plus 20%, along with LHA rates uprating to the 30th percentile. Changing to a 10th percentile-linked cap creates an additional saving of £120 million over the five years to 2033/34.[71] In 2033/34, it saves an extra £38 million in-year.

Figure 11 – Proposed weekly national LHA caps

Recommendation 5: Move additional bedroom eligibility and deductions to 18.

Raise same-sex sharing age threshold to 18 and apply the housing cost contribution or non-dependant deduction from 18.

The housing benefits system currently treats young people inconsistently. According to the official statistical measure of overcrowding, known as the bedroom standard, a household is considered overcrowded if any single person (not in a couple) aged 21 or over does not have their own room.[72] This minimum standard is referenced in social rented sector allocations guidance to local authorities for the purposes of determining household needs, but local allocations policies can vary.[73] At the same time, social rented sector households are not considered underoccupied for the purposes of a housing benefits under-occupation deduction if someone between 16 and 21 has their own room.

When a child in a private rented sector claimant household turns 16, their family becomes eligible to claim for a separate room if they are sharing with a same-sex sibling. If the family does not move house to take up this extra room, they simply receive this as a larger benefit award if their rent is above their previous LHA rate. In UC, a housing cost contribution only applies from the age of 21. HB applies a non-dependant deduction from age 18 for some households.

There is a clear mismatch between the statistical measure of occupancy which applies to all homes, including those not claiming benefits, and the benefit treatment of occupancy. Uneven thresholds make housing benefits more generous for families from 16, right at the point where childcare costs are diminishing and that young person could start contributing to household income. It incentivises moving or being allocated to larger homes that may then become unaffordable when that 16 year old leaves in just a few years when the housing cost contribution, non-dependant deduction or under-occupation deduction applies.

Adults can live independently making their own UC claim from 18, with individuals under 35 usually limited to the shared accommodation rate. Moving bedroom sharing rules all the way to the bedroom standard at 21 could therefore be more expensive if more young people moved out to start their own claim. Instead, this recommendation proposes aligning same-sex sharing rules up to 18 while bringing the housing cost contribution or non-dependant deduction to 18 too, aligning with the threshold for an independent claim.

These measures set a clear expectation for young people that having their own room (if previously same-sex sharing) requires contribution from them or their family. Making their own claim at 18 likewise comes with usual conditionality requirements. Claimant families will continue to be eligible for the UC child element for young people in the household until the August after they turn 19 if they are in non-advanced education or training.

Together with the harmonisation of housing-related age boundaries, these steps create a stronger incentive for young people to take on employment, education or training – or for their parents to work to meet the shortfall. Benefit savings are expected, but likely to be small. There are insufficient breakdowns of household composition available to quantify the effect.

Conclusion

This package presents a series of options to control a housing benefits bill that is likely to grow rapidly without reform. There are many other ways in which benefit eligibility, conditionality and tenancies can – and should – be changed to improve the housing benefits system, but most require significant time for primary legislation and implementation.

Despite many attempts to restrain spending through freezes, caps and cuts, the housing benefits bill risks spiralling to even more unsustainable levels if likely policy decisions are taken over the next few years. Making serious savings within a single parliament requires decisive action through existing powers and regulation changes.

Permanently uplifting LHA rates to the 10th percentile offers a more sustainable path that avoids the cycle of arbitrary freezes and sudden cost jumps in the future. Extending the same ceiling to general needs social housing creates a single, consistent maximum across tenures.  An immediate social and affordable rent freeze can keep spending under control while longer term reform is considered that leaves behind a rent formula crafted in the last century.

The final two measures on national caps and bedroom eligibility begin to address some of the geographic and contribution-related unfairness that offers choices to claimants that are not available to many working families. This package provides the starting point for rationalising housing benefits spending that is more predictable for claimants and more affordable for the state.

[1] Onward analysis of: DWP, Annual DWP Benefits Statistics Compendium, September 2026, link; ONS, Households by household size, regions of England and Great Britain constituent countries, April 2026 link.

[2] Onward analysis: ONS, Census 2021, Number of households, link.

[3] DWP, Benefit expenditure and caseload tables 2026, link.

[4] Onward analysis; Local Housing Allowance-bound private rented sector tenants and general needs social rented sector tenants only.

[5] The Universal Credit housing element and Housing Benefit are referred to collectively as “housing benefits.”

[6] MHCLG, Social housing lettings in England, tenants: April 2024 to March 2025, November 2025, link.

[7] DWP, Benefit expenditure and caseload tables 2026, link.

[8] DWP, Benefit expenditure and caseload tables 2026, link. 

[9] DWP, Benefit expenditure and caseload tables 2026, link.

[10] OBR, Economic and fiscal outlook – March 2026, Annex B, link.

[11] HM Treasury, Spring Forecast 2026, link.

[12] As per paragraph 2 of Schedule 3B to The Rent Officers (Housing Benefit Functions) Order 1997 (link) made under s.122 of the Housing Act 1996. Paragraph 2(2) sets the LHA as the lower of the 30th percentile, determined under sub-paragraphs (4) to (8), and the national cap. The same structure appears in Schedule 1 para 2 of the Rent Officers (Universal Credit Functions) Order 2013 (link) and in Schedule 3B of the equivalent Scotland Order (link).

[13] For example, the latest freeze year is set out under The Rent Officers (Housing Benefit and Universal Credit Functions) (Modification) Order 2026, link.

[14] Onward analysis, DWP Stat-Xplore, Local Housing Allowance indicator by Month, counting Households on Universal Credit, split by proportion with LHA that covers rent and LHA that does not cover rent.

[15] Onward analysis, DWP Stat-Xplore, Local Housing Allowance indicator by Month, counting Households on Universal Credit. By March 2024, claimants with LHA that did not cover rent was 1,009,604. In December 2023, the number of households with LHA that did not cover rent was 985,697, roughly the same as the volume in May 2026 of 985,372, meaning the climb took around three months.

[16] Onward analysis, 329 out of 960 BRMAs and bedroom categories fall below the 10th percentile, calculated from the Valuation Office Rent Officers’ Shadow Lists of Rents and their Scotland and Wales equivalents, link. 

[17] Onward analysis, as above with expected growth rate calculated from the ONS Price Index of Private Rents 10 year growth rate by local authority, applied to BRMAs by share of each local authority in each BRMA, link.

[18] Central London BRMA is omitted from the scale due to an extremely high gap of £1,538 per month. 30^th percentile comparison does not include national caps.

[19] The 2015/16 freeze started from below the 30th percentile when rates had been uprated by CPI and then 1% in the years previously. It also later included recycling some of the savings through Targeted Affordability Funding to raise LHA rates in areas that had fallen furthest below the 30th percentile.

[20] Chartered Institute of Housing, CIH among 40-strong coalition urging government to unfreeze local housing allowance, October 2025, link.

[21] EDM 2202: Freezing of Local Housing Allowance, link; also this year, EDM 616: Local Housing Allowance rates, link.

[22] See, for example, Crisis, No Home to Go To, July 2026, link; Resolution Foundation, Saving Private Renters, September 2026, link.

[23] Andy Burnham, Andy Burnham Speech at the People’s History Museum, Manchester, June 2026, link.

[24] PoliticsHome, Boost Local Housing Allowance To Tackle Rough Sleeping, Says Andy Burnham, November 2025, link.

[25] Greater Manchester Combined Authority, Statement from The Mayor on today’s Autumn Statement, November 2023 link.

[26] Resolution Foundation, Saving Private Renters, September 2026, link.

[27] Onward analysis, DWP, Benefit expenditure and caseload tables 2026, link.

[28] Onward analysis, DWP, Shadow List of Rents April 2026: collated 1st October 2024 – 30th September 2025, link; Scottish Government, Private Sector Rent Statistics, Scotland, 2010 to 2025, link; Wales does not publish a consistent shadow list of rents, but publishes this data by local authority under ad-hoc statistical requests, the latest of which contains information from 23 October to 3 November 2023 and is adjusted to align with the English and Scottish start years, link.

[29] Onward analysis of ONS, Price Index of Private Rents, September 2026, link.

[30] ONS, Price Index of Private Rents, September 2026, link; note that the PIPR figure is UK wide, while the model excludes Northern Ireland where this policy area is devolved. The national figure given is the average while the model itself uses local growth rates.

[31] Only small volumes of claimants migrated onto UC via natural migration (triggered by a change of circumstances), voluntary migration or new claims before this point.

[32] Onward analysis, DWP Stat-Xplore, Local authority, entitled Bedrooms (LHA only), April 2018. LA to BRMA proportions applied.

[33] HB data on Stat-Xplore is split by pre-April 2018 and post-April 2018, so this date was selected to give the longest possible view from single consistent extracts.

[34] Regional and national scaling factors are used for missing values where volumes are too low to show values.

[35] DWP, Benefit expenditure and caseload tables 2026, link.

[36] Onward analysis, DWP Stat-Xplore LHA covers rent and LHA does not cover rents and Shadow list of rents calculations.

[37] OECD, Social rental housing stock, 2022, link; MHCLG, English Housing Survey, Chapter 1: Profile of households and dwellings, July 2026, link.

[38] Regulator of Social Housing, Registered provider social housing in England – stock and rents, October 2025, link.

[39] MHCLG, How to implement Social Rent convergence, March 2026, link.

[40] MHCLG, Future social housing rent policy, Consultation outcome, January 2026, link.

[41] MHCLG, How to implement Social Rent convergence, Consultation outcome, March 2026, link.

[42] MHCLG, How to implement Social Rent convergence, Consultation outcome, March 2026, link; OBR, Economic and fiscal outlook – March 2026, Annex B, link.

[43] HMT, Forecasts for the UK economy, September 2026, link.

[44] Onward analysis, DWP, Benefit expenditure and caseload tables 2026, link.

[45] Regulator of Social Housing, Registered provider social housing stock and rents in England, link. Regulator of Social Housing, Local authority registered provider social housing stock in England, link; Regulator of Social Housing, Private registered provider social housing stock in England, link.

[46] MHCLG, Policy statement on rents for social housing, April 2026, link.

[47] MHCLG, Social housing lettings in England, tenants: April 2024 to March 2025, November 2025, link.

[48] Chartered Institute of Housing, Rent consultation analysis, December 2024, link; National Housing Federation, How to implement rent convergence, link.

[49] DWP, Shadow List of Rents April 2026: collated 1st October 2024 – 30th September 2025, link.

[50] HMT, Forecasts for the UK economy, September 2026, link.

[51] Homes England, Social and Affordable Homes Programme (SAHP) 2026 to 2036, November 2025, link.

[52] Regulator of Social Housing, Registered provider social housing stock and rents in England, link. Regulator of Social Housing, Local authority registered provider social housing stock in England, link; Regulator of Social Housing, Private registered provider social housing stock in England, link.

[53] MHCLG, Future social housing rent policy from 2026-36: CPI+1% plus convergence options, July 2025, link.

[54] Onward analysis.

[55] Aberdeen and Shire’s frozen 2028/29 30th percentile LHA rate does not cross the 10th percentile due to negative rental market growth.

[56] Onward analysis; this policy is costed for England only in line with the England only baseline.

[57] Onward analysis, DWP Stat-Xplore, February 2026 figures.

[58] National Housing Federation, Impact of applying Local Housing Allowance rates to general needs social tenants, October 2016, link. Note the analysis uses CORE data from 2012/13 due to lack of more recent breakdowns.

[59] Onward analysis, DWP Stat-Xplore, February 2026 figures.

[60] Institute for Fiscal Studies, The Budget and Spending Review: what do they mean for social housing?, December 2015, link.

[61] National Housing Federation, Considerations on rent, 2022, link.

[62] Regulator of Social Housing, Registered provider social housing in England – stock and rents, October 2025, link.

[63] Onward analysis, Census 2021, Lifestage of household reference person, number of people in household with no long-term health condition and tenure of household, link.

[64] Onward analysis, Census 2021, Lifestage of household reference person, number of adults in employment in household, number of people in household with no long-term health condition and tenure of household, link.

[65] HM Treasury, Summer Budget 2015: policy costings, July 2015, link.

[66] Savills for the Local Government Association, Housing Revenue Account Research Update, October 2024, link.

[67] Regulator of Social Housing, 2025 financial forecasts of private registered providers, January 2026, link.

[68] Regulator of Social Housing, 2025 financial forecasts of private registered providers, January 2026, link.

[69] MHCLG, The Direction on the Rent Standard, January 2026, link; MHCLG, Policy statement on rents for social housing, April 2026, link.

[70] Explanatory Memorandum to The Rent Officers (Housing Benefit and Universal Credit Functions) (Amendment) Order 2024, link.

[71] Onward analysis of impact in addition to Recommendation 1.

[72] MHCLG, English Housing Survey 2024 to 2025, Chapter 1: Housing quality, January 2026, link.

[73] MHCLG, Allocation of accommodation: guidance for local authorities, updated April 2026, link.

The post Through the Roof: How to reduce housing benefits spending appeared first on Onward.

The eyewatering cost of Britain’s benefits bill is often discussed, but a key part of the conversation is usually missing. The additional payments that claimants can receive because of their eligibility for their regular benefits, known as passported benefits, are rarely included in analyses of how and why spending on working-age welfare has become so out of control. This paper reveals the true scale of bonus benefits worth billions that are pushing against the intended incentives for claimants to move into work and towards full financial independence.

Universal Credit payments were always meant to consolidate passported benefits. But the protracted rollout of Universal Credit has left these schemes running in parallel, fragmented across Whitehall, growing in scope and cost beyond the main levers of the welfare system. With rollout finally due to complete this parliament, now is the time to consider how to return to the original policy intent.

Poverty metrics have underestimated the effective benefit income provided through passported benefits, distorting how support is targeted without allowing adequate evaluation of outcomes. Some are left missing out on thousands while others receive so much that they have little incentive to seek work or come off benefits altogether. Paternalism is destroying aspiration.

Over £10 billion is estimated to be spent on working-age claimants alone through passported and discretionary schemes run by Government and utilities companies. Despite the price tag, they are too often failing to deliver the better outcomes for all: 

• Free school meals expansion which is set to cause chaos for school funding. 
• Taxis to school for families already getting Motability cars.
• Free holiday club places squeezing fee-paying parents.
• Bursary cash for teenagers that may be damaging their earnings potential.
• Free childcare for parents to stay at home, paid for by working parents.
• Prescription charge exemptions for 96% of all prescription costs. 
• Dentistry, sight tests, health travel costs through archaic claims systems. 
• Pregnancy grants likely failing to improve outcomes for mum or baby. 
• Healthy food cards reportedly used for alcohol, tobacco and Playstations. 
• Energy bill and cold weather rebates for already energy efficient homes.
• Heating and insulation upgrades worth almost £20,000 per household. 
• Water bill caps and special rates raising already surging water bills.
• Special broadband tariffs giving claimants worse deals than switching.
• Mismatched legal aid and court fee reforms set to bring in new cliff edges.
• Funeral expense payment rules leaving grieving relatives without support. 
• Savings top-up accounts driving claimants to accrue more debt.
• Council tax discounts double-taxing working claimants. 
• Local schemes being used for mini-golf, spa facility use and cinema tickets.
• Discretionary housing funds working against national welfare policy.

Radical rationalisation of schemes into Universal Credit is necessary to deliver the simpler, more consistent and more certain system originally intended. Claimants should face the same basic budgeting dynamics as others in return for greater control over their cashflow. Alongside this, better data can give a more complete picture of the sufficiency of different benefit components within a single payment. 

Implementing a common framework for unforeseen or unavoidable costs would help simplify how those in crisis can access support. A more coherent set of rules and thresholds should govern routes for those on low incomes to receive one-off support for specific unexpected and unavoidable costs, including those beyond benefit eligibility. 

Lowering the Universal Credit taper to 50% is the final step in resetting the balance in favour of working, working more hours and increasing earnings without facing arbitrary penalties. Together these measures can improve the system for claimants and taxpayers alike. 

Introduction

An expansive menu of extra payments and freebies for those already receiving benefits is weakening work incentives at a staggering cost of £10 billion. Working age benefit claimants negotiating this sprawling system are met with incoherent rules fragmented across over a dozen different schemes. This paper is the first systematic review of the costs of all benefits passported through receipt of Universal Credit and their average value to those claiming them. Alongside discretionary local schemes, this paper reveals how they collectively total over £10 billion in additional working-age welfare on top of Universal Credit payments.

From its inception, the purpose of Universal Credit was to create a simplified benefits system where people were always better off starting work, taking on more hours, and progressing in their careers, rather than staying on benefits. It promised to consolidate payments into a simpler single award, smoothing out the cliff edges that saw support sharply withdrawn once you worked a certain number of hours or earned a certain amount. It was meant to save taxpayers’ money too.

But, thirteen years on since the rollout of Universal Credit began, it has become anything but a single, universal payment. The benefits system for those of working age has ballooned in size, scope and cost. Reform that was meant to streamline multiple income-replacement legacy benefits has instead carried over and expanded multiple sub-schemes that are accessed by virtue of already being a claimant. These are collectively known as “passported benefits”: benefits for which eligibility is conferred via another benefit for which eligibility requirements have already been met.

A two-tier benefits system has been created: one in which savvy claimants can gain thousands of extra pounds a year, but those with the least awareness or capacity still miss out on support. Jagged cliff edges have been carved, whereby being on benefits grants access to a wide array of top-ups, but reaching certain earnings levels risks suddenly losing these too. For everything from children’s meals to energy bills, there is an associated concession largely or exclusively for benefit claimants, almost half of whom are not required to look for work at all. In turn, passported benefits have created a deeply unfair two-tier state, where many of those just beyond benefit eligibility are fundamentally worse off than many claimants.

To avoid political fights, successive governments have ended up double-handling certain living costs through passported work-arounds. Policy failures have been mitigated with more bureaucracy, rather than addressing the drivers of the high prices that affect everyone. Worse still, pervasive passporting has made it more rational to remain a client of the state rather than struggle through the jobs market, risking losing bonus entitlements once in work. Paternalism has triumphed over aspiration, undermining the core purpose of working-age welfare reform.

This paper exposes the value of these schemes to claimants, the cost to taxpayers and consumers, and the cumulative effect on incentives for claimants to work at all and to progress in work. It proposes a radical reshaping of this area of state support, creating a welfare system with greater certainty, consistency and simplicity for claimants, and better value for the taxpayer.

Background

In the Welfare Reform Act 2012, Universal Credit (UC) set out to streamline a series of income-related legacy benefits into a single, integrated award to meet all essential living costs. This single payment was meant to slowly taper away benefit income while people transitioned into work, avoiding the previous cliff edges at 16 and 30 hours of work that would trigger sudden losses of income. As part of this simpler, fairer system, UC’s creators posited that it would be possible to do away with a plethora of schemes that had previously sat alongside legacy benefits. The foundational Welfare that Works policy document on UC stated the following:

It was originally estimated that it would take from 2013 to 2017 to move all existing legacy benefit claimants onto the new system. However, today in 2026, managed migration of claimants is still not complete. The latest estimates suggest that migrating some of the most complex claims will take until 2029.^[2] Alongside this protracted rollout period, many of the passported schemes available to legacy claimants continued to be passported on the same basis to UC claimants too to avoid disincentives to migrate and legal challenge, even if it would be technically possible to roll these into UC payments.

During the Covid-19 pandemic and the global energy price spike, surging inflation gave rise to renewed focus on the cost of living and the ability of those on low incomes to afford the basics. In addition to a temporary £20 uplift in UC payments, this period saw the rapid creation, expansion or uprating of multiple passported benefits schemes that, unlike the uplift, have not all been scaled back since. Rather than phasing out passporting, schemes like free school meals and the Warm Home Discount are expanding to all UC claimants in the coming year, but still remaining separate from UC itself.

Despite the Secretary of State for Work and Pensions having formal responsibility for the benefits system, control over passported benefits has become diffuse across government. Now, almost every domestic policy department administers or regulates at least one passported benefit or discretionary scheme, as shown in Figure 1. Each scheme has its own rules, caps and thresholds that layer on top of UC-enabled eligibility, many of which are not adjusted for years at a time to reflect real-world prices. Having billions of additional welfare beyond the Department for Work and Pensions’ (DWP) borders makes the already alarming trajectory of the benefits bill all the more acute, with serious but underrated consequences for efforts to decrease the budget deficit. 

Figure 1 – Scheme by relative size of expenditure on working-age claimants

Source: Onward analysis

Eligibility checks

Checking eligibility for passported benefits relies on multiple parts of the state being able to confirm existing benefit receipt. Unlike PAYE data which is shared on a real-time basis between HMRC and DWP, the onward sharing of benefit receipt data has no seamless flow to the other departments or companies involved in passported schemes. Instead, for most passported benefits, manual bulk data extracts are shared on a daily or weekly basis for operational eligibility checks. This is onerous and expensive to administer.

According to the DWP’s own careers website, there are over 300 data professionals working in its Data Practice, responsible for how they model, transform and securely use data across DWP and wider government.^[3] There will then be further costs from those in other government departments, public bodies and private companies responsible for processing the data, overlaying additional criteria and delivering the benefits. 

Given that eligibility for passported benefits is conferred from other benefits claimed, it is easy to assume that take-up would be high across the board. In reality, it is highly uneven. There are a range of different ways in which passported benefits are accessed. Some require the claimant to provide evidence of an existing benefit claim, while others require the institution handing out the benefit to check on the claimants’ behalf.

For example, free prescriptions operate on a self-declaration system. Others like free school transport require parents to fill in an application form which is then verified by the local authority using central government data and local information on the distance to the school. The level of friction in the system caused by the need to apply for some passported benefits means that there are widely varying levels of uptake.

Uncounted income

Assessing the appropriate level of financial support for people with different personal means is a difficult task. For those without earned income, this is particularly challenging. The UK’s official poverty measures – absolute and relative poverty – use the Households Below Average Income (HBAI) dataset, which relies on self-reporting of income in the annual Family Resources Survey (FRS), which is then combined with administrative data on DWP benefits, HMRC data and price indices. Both official poverty measures are relative measures, setting an arbitrary line at 60% of median household income, with one rebasing this every year and the other looking at how incomes have changed since 2009/10.

Neither poverty measure looks at what these households are able to afford in any given year, nor accounts for what they may be provided in-kind, free or at a subsidised rate by virtue of being a benefit recipient. Outside of Covid-related cost of living payments, only free school meals, Healthy Start and the Warm Home Discount are routinely counted.^[4] For most other passported benefits, the HBAI dataset excludes their value in poverty measures, despite them having a direct impact on the daily living costs of many considered below the respective poverty lines.

The material deprivation metric, which includes answers from the FRS on the resources and activities that families can afford, does not attach any monetary value to these items. An additional measure of poverty developed by the Social Metrics Commission is currently under consideration by the Government, which would assess whether households have Below Average Resources rather than income, but does not plan to incorporate passported benefits due to lack of reliable data.^[5]

Difficulty in assessing claimants’ income bleeds through into the design of passported benefits. Schemes use a jumbled assortment of different thresholds, including disposable income, earned income, effective income after certain savings could be liquidated and income with certain specific disregards. Several passported benefit schemes use their own income-related thresholds which typically do not count benefit income, therefore directly penalising those trying to earn enough to come off benefits.

Figure 2 below shows different equivalent monthly earnings thresholds for select schemes to show relative generosity. Some schemes count claimants’ income over the whole year, while some take each individual monthly assessment period, meaning eligibility can fluctuate from month to month along with earnings.

Figure 2 – Equivalent monthly earned income threshold by UC passport or means test

Source: Onward analysis

Other schemes also use levels of savings thresholds in their eligibility requirement which differ from the standard capital limits in UC. And with schemes for which eligibility applies throughout a UC claim, there is still a cliff-edge at the end where those with a very small UC award go from receiving thousands extra in passported benefits to nothing if they see a minor increase in earned income. While some schemes also have income tests for those not on any benefits to gain eligibility, there is again no consistency in how their income is treated.

Evaluation gaps

The inaccurate reporting of total effective income has critical policy implications. As passported benefits have changed in scope or generosity, there has been no year-on-year total measurable impact on poverty alleviation, despite the extra cash that is given out. Even for individual schemes that are counted, such as free school meals, bold statements about lifting 100,000 children out of poverty by 2030 are taken from a static microsimulation model making a snapshot estimate, which includes assuming 100% take-up, with no adjustment for those already receiving free school meals under transitional protections.^[6]

Both internally within government and externally for research purposes, the lack of continuous data to evaluate whether any passported benefits have met their modelled poverty reduction goals is highly problematic. While specific policy simulation models for individual schemes are possible, there is no real time information to monitor the direct upsides or unintended consequences of these policies in aggregate. There is both little cross-government tracking of those who may be missing out on multiple passported benefits, nor evaluation of how claiming many can distort work incentives.

Figure 3 – Estimates of select unclaimed passported benefits in Great Britain 2025/26

Source: Policy in Practice^[7]

Recent analysis by Policy in Practice estimates that over 7.5 million people are missing out on at least one type of passported benefit for which they are eligible.^[8] This is attributed to several factors, principally awareness, complexity, and stigma associated with claiming. This leaves some without thousands of pounds which someone else in near identical circumstances may be receiving. For example, in 2025/26 the value of support missed out on was estimated as more than £3.3 billion in council tax support, £1.5 billion in broadband social tariffs, £745 million in water support and £722 million in the Warm Home Discount.^[9]

Likewise, recent UK-specific evidence is scant on the relative merits of providing benefits in-kind versus ringfencing cash or labelling cash for a specific purpose. While there has been some analysis of the impact of labelling fully fungible benefits like the Winter Fuel Payment and the Education Maintenance Allowance for their specific purposes, their behavioural impact is mixed, with difficulty tracking by how much the cash had helped manage the intended cost versus improving the claimants overall outcomes.^[10]

The counterfactual scenario of rolling such benefits into core benefit income is rarely considered for schemes providing non-cash benefits. Behavioural analysis of the upsides of passporting usually focus on whether the cash has been used for its labelled purpose rather than considering whether that was really the best use within that household’s total budget. In essence, it starts from a deeply paternalistic notion that bureaucrats running a government scheme know better than a claimant how they should spend money to support themselves.

The cost of policy crisis

Lack of robust continuous evaluation of individual passported benefit schemes, let alone any tracking of their cumulative impact on effective household income, has meant siloed schemes have proliferated. The pathology of “everythingism”, as recently set out by Re:State’s Joe Hill, has gripped each government department in this regard too.^[11] Wildly different and poorly-defined markers of poverty, inequality and perceived vulnerability have become baked into the design of domestic policy, detracting from the cost-saving potential of simply allowing each area to do one thing well.

In the last few decades, the narrative on poverty itself has snowballed into multiple types of poverty: food poverty, fuel poverty, water poverty, digital poverty, clothing poverty, carpet poverty, mattress poverty and more. Each has their own stakeholder ecosystem lobbying different parts of government for specific carve-outs, despite the central issue for all of them being a household’s total ability to afford essentials through their income.

Many stakeholders directly benefit from the schemes they have lobbied for, getting government contracts to assist in the delivery of the over-complicated schemes they helped design or receiving research funding to confirm their biases. Their intentions may be well-meaning, often irresistible to ministers seeking a positive news story, but there is a cost.

As inflation began to spike in late 2021, discussion of the affordability of daily essentials evolved into discussion of a “cost of living crisis.” Volatile global circumstances certainly contributed considerably to surging prices for some essentials. But as the peak has receded, the Government has continued to wrestle with stubbornly high expenditure on public services. This has exposed an altogether more uncomfortable truth – that the “cost of living crisis” is, at least in part, a cost of policy crisis.

Much of the response to rising prices has focused on bolstering demand side protections by uprating passported benefits rather than supply side measures to address the underlying drivers. For each bespoke scheme to cover the price of goods and services that the rest of the population purchase with their own income, the cost is borne elsewhere. This is not just by the taxpayer picking up the cost of each scheme, but also through the wider distortive impact on market prices when a significant cohort receives a subsidy.

If the companies are forced to offer products at a loss or lower profit margin for claimants, they will recoup the revenue from other consumers. For some passported benefits schemes, like those run by utilities companies that are not financially subsidised by the government, the cost is directly passed onto consumers in the form of higher bills. Yet supply side policies like deregulation, enabling competition or corporation tax cuts that could lower consumer costs for everyone, including those just beyond benefit eligibility, are not considered as the primary levers for lowering the cost of living.

In a clamour to appear caring, the welfare state has splintered. Each domestic policy department now effectively runs its own poverty programme, with its own inaccurate understanding of what poverty is and using its own bespoke delivery apparatus. There is no common accounting for the total support any household receives, no consistent evaluation of outcomes, and no ministerial line of sight over the cumulative fiscal and market impact. This is an irrational way to spend public money: it duplicates administration, entrenches arbitrary eligibility cliffs, and pushes costs onto non-recipients via cross-subsidy, price effects and higher charges. The net effect harms modest-income working households who receive little or nothing, while obscuring the true level of state support and who ultimately pays for it.

Work incentives

Unlike other benefits, passported benefit awards are usually binary rather than proportional to the amount of UC award or to need. While elements included within a UC claim are tapered away with earnings, most passported benefits have a fixed value: you either get it or you don’t. The impact of passported benefits on work incentives was noted from the inception of UC, yet little assessment of their impact has taken place since.

In 2012, the Social Security Advisory Committee independent review of passported benefits highlighted how they “can create an unhelpful cliff edge and reduce the apparent gains to work.”^[12] In accepting the findings of the review, the Coalition Government noted that “the design of passported benefits under UC can have a key impact on incentives to work”, signalling their intention to roll the current suite of passported benefits into UC payments. However, there has been no comprehensive evaluation of the cumulative impact of passported benefits through the entire rollout of UC to date.

Conditionality

Passported benefits increase incentives on claimants to be classified into different UC conditionality regimes because not working means no risk of losing entitlements at various income thresholds or at the end of the claim. Conditionality regimes determine the different expectations upon claimants to look for work, undertake training, work more hours or not have to undertake any work-seeking activity at all.

Since mid-2020, the number of people with no requirements to work or take any steps towards finding a job has ballooned from below a million to 3.7 million.^[13] In part, this is a feature of leaving the most complex legacy cases, usually involving disability, as the last cohort to migrate, but it is also caused by the surge in new health-related claims since the Covid-19 pandemic. As a consequence of this change in case mix, for the vast majority of UC claimants, receipt of passported benefits is effectively unconditional and often permanent, with no expectation that they will work or look for work while they continue to receive free or discounted goods and services paid for by those working.

Figure 4 – UC claimants by conditionality regimes

Source: DWP Stat-Xplore^[14]

Modelling incentives

Financial incentives to start work and then progress in work can be measured by looking at the participation tax rate and the marginal effective tax rate respectively. The participation tax rate (PTR) measures the proportion of earnings deducted through higher tax and lower benefit entitlement at the point of moving into work. The marginal effective tax rate (METR), sometimes known as the marginal deduction rate, is the percentage of each additional £1 in earnings that is lost to tax or benefits reduction. Taking Institute for Fiscal Studies analysis from 2024, just under 60% of working UC claimants have a participation tax rate of 50% or more.^[15] This means that if they earned £10,000 before tax per year in work, they would see their income rise by £5,000 or more if they started working.

Figure 5 – Participation rates and marginal effective tax rates, among workers eligible for UC or legacy benefits

Source: Institute for Fiscal Studies^[16]

Likewise for those seeking to progress in work while on UC, 80% lose more than 50p for every extra pound they earn.^[17] 63% of those working on UC lose more than 60p for every extra pound. It demonstrates how the majority of those working on UC have well above 55% of their income deducted through the taper and tax.^[18] This is a product of the damaging interaction between the UC system and the tax system that directly works against incentives on claimants to take on more hours or seek higher pay. Neither of these rates typically include the loss of passported benefits as claimants take on more hours.

Modelling the interaction between the tax system, which treats people as individuals, and the benefits system, which looks at the whole household, is complicated enough on its own. But adding more than a dozen passported benefit schemes, each affecting different household compositions, becomes almost impossible. There is no comprehensive policy modelling of participation rates or marginal effective tax rates that include the additional effective income provided through passported benefits. In the absence of this modelling, the paper takes the first step: understanding the eligibility routes, quantifying the costs and assessing the interaction with work.

Scheme-by-scheme analysis

This section gathers the best available published data to quantify how many claims are being made for each passported scheme, the average value of the benefit and total expenditure on those passported via UC or legacy working age benefits that are being replaced by UC. It includes both the costs to taxpayers of government-funded schemes and those that government regulation requires companies to fund, for which they will pass on the costs to other consumers.^[19]

It also lists discretionary schemes that are available largely or exclusively to claimants that can further top up their income, with best estimates of the proportion of the scheme used by UC or legacy working-age claimants. In addition, we estimate the cost of these policy decisions in terms of the funding that has to be provided to UK nations beyond England as a result of the UK Government’s policy, by using Barnett formula proportion adjustments, the method for which is explained further below.

This section then goes through each passported benefit to discuss each passported benefit. If scheme explanations appear overly-technical, arbitrary in nature and difficult to process, that is precisely the point – their rules are often incomprehensible to claimants and impossible for the Government to manage effectively.

The scheme-by-scheme analysis that follows will seek to answer the following questions:

• What are the eligibility criteria?
• How many claimants on UC or legacy working-age benefits are eligible?
• How much does each claimant receive on average?
• Is there an alternative non-passported route to access the scheme or service?
• What is the total spending on those eligible via UC or legacy working-age benefits only?
• What evaluation has taken place?
• What impact might the scheme have on incentives to work?
• What changes are announced or expected in the current calendar year?

Figure 6 – Claim count, average award, total expenditure and Barnett adjustment by scheme

Source: Onward analysis^[20]

Limitations

Legacy benefits

While the rollout of UC continues, different legacy working age benefits remain listed as eligibility criteria for most passported schemes, with no consistency as to which apply. Most list income-based Jobseekers Allowance (JSA), income-based Employment and Support Allowance (ESA) and Income Support, but exclude contributory JSA and ESA which are remaining outside UC as they are not classed as income-related benefits.^[21]

Figure 7 below shows schemes which passport via different benefits in England from 2026/27, including changes to eligibility for Free School Meals and the Warm Homes Discount which will passport to all those on UC within this year. Some provide a passport but with specific additional conditions, such as an income or savings cap. For some, like water or broadband social tariffs and council tax reductions, eligibility is heavily caveated as these are not nationally consistent schemes.

Figure 7 – Eligibility by passporting benefit in England from 2026/27

Source: Onward analysis

With a reasonable prospect that UC rollout will complete during the current parliament and with legacy benefit caseloads diminishing throughout, this paper discusses passported benefit eligibility via UC while acknowledging that there will still be small numbers eligible via legacy benefits.^[22] Indeed, the end of legacy-related eligibility over the next few years provides the opportunity to radically change how passporting operates, free of the need to retrofit innovation onto legacy systems.

Pensioner benefits

In addition to legacy benefits, many passported benefit eligibility criteria include those on pensioner benefits, as shown in Figure 7. Pension Credit is the means-tested benefit for those on low incomes above state pension age, with two different elements depending on the level of household savings. Pension Credit Guaranteed Element is usually used as the UC-equivalent passport, but some include Pension Credit Saving Element too.

Only some schemes provide specific breakdowns of the numbers claiming by eligibility route or by age to determine how many of those claiming are of working age. Where reasonably possible, those claiming via pensioner benefits are removed from analysis of number of claimant caseload and cost, or else are estimated to be negligible due to the expected age of the claimant.

Disability benefits

Recent political attention on welfare and work incentives has been dominated by focus on the significant increases of those claiming disability and health-related benefits, both through UC and Personal Independence Payments (PIP). 39% of people on UC are now in receipt of the UC health element, up 41% in just a year.^[23] While over two thirds of this was migration of legacy ESA claimants which are one of the last cohorts to receive migration notices, new claims are rising year-on-year too.^[24]

While most UC elements were frozen in cash terms from 2016 to 2020, PIP was uprated in line with CPI inflation, making it relatively more attractive to claim alongside UC. To qualify for the enhanced rates, a prospective claimant must be assessed, scoring sufficient difficulty with carrying out activities usually associated with work, such as being able to get out of bed, washed and dressed independently, being able to travel to a workplace or ease of communication with colleagues or customers. While assessments for PIP and the UC health element will remain separate until at least 2029/30, there is still a commonality between scoring sufficient points to gain a high PIP award and proving limited capability for work.^[25]

This link extends to eligibility for passported benefits too. If a claimant does not want to risk losing access to passported benefits by earning too much from work, having no work requirements through being assessed as having limited capability for work and gaining more income through PIP instead can grant near-permanent entitlement. Reassessments remain mired in a Covid-related backlog, with 110,000 existing claimants awaiting Work Capability Assessments.^[26] The Government’s proposed “Right to Try” guarantee may prevent work in itself being considered a change of circumstances triggering a reassessment, earned income may still result in ineligibility for some passported benefits.^[27] Changes to Work Capability and PIP assessments are sorely needed to bring more claimants into work-seeking conditionality regimes, but beyond the direct scope of this paper.

Where health conditions provide a specific eligibility for a passported benefit scheme, these are noted in the scheme-by-scheme analysis. Passporting is also provided directly from some disability benefit claims. The enhanced rate mobility component of PIP grants access to significantly subsidised new vehicles through Motability.^[28] This prompted several tax changes exclusive to Motability at the Autumn Budget and proposals from the Conservatives to tighten eligibility.^[29] As Motability is not passported through UC and has already received significant separate scrutiny, it is not considered in detail in this paper.

Devolved nations

UC is a UK-wide benefit, but passported benefits have different territorial extents. This analysis of passported benefits primarily focuses on those available in England or England and Wales where relevant depending on devolved powers in different policy areas. Where relevant, alternative schemes operating beyond England are mentioned but excluded from direct costing analysis.

The Welsh Assembly has no devolved competence over UC, but does have devolved power over passported benefits like free school meals, free prescriptions, council tax reduction and other discretionary assistance delivered outside the remit of the DWP. The Scottish Parliament has additional powers under the Scotland Act 2016 under which it has chosen to change aspects of UC payment delivery. It has also chosen to provide additional benefits such as the Scottish Child Payment to those with children in receipt of UC or Pension Credit, but this is delivered separately from the UC system.

To get an estimate of total policy costs as a result of UK Government policy decisions, Barnett formula percentages are used to estimate funding. These are not the exact amounts that Wales, Scotland and Northern Ireland receive, as these are calculated at the point of changes in policies covered by departmental expenditure limits (DEL) rather than the totals in any given year, with population adjustments revised over time. Demand-led policies funded through annual managed expenditure (AME) only have Barnett applied at the point they are initially transferred into the block grant. Costs to private companies through regulated schemes are also calculated using the same percentages where relevant to reflect population size-based estimates, although these are funded directly by companies rather than Government. Barnett-based estimates of total expenditure are intended to make a general approximation of the scale of cost that UK Government policy decisions incur, rather than assess individual spending on any passporting policies implemented beyond England.

Education

Free School Meals

Provision of free school meals on a nationally-consistent basis was first introduced in the 1960s, having previously been provided at the discretion of the local authority. This set an income cap linked to family size for the first time, which was just above half of gross average earnings for a two child family.^[30] Thatcher’s 1980 Education Act reforms then introduced the first formal “passporting” for free school meals: eligibility became automatic for families receiving Supplementary Benefit (typically for those out of work) or Family Income Supplement (for those in low-paid work). Free school milk, which she had previously limited to children under seven, was also passported on the same basis for those aged five to seven, plus those with certain medical needs.

Since then, the passporting of free school meals via low income or out of work benefits has remained. Free school meals for infants in reception, Year 1 and Year 2 were removed from the passported system in 2013 to be provided on a universal basis in all state-funded schools. For those in Year 3 and above, an income cap of £7,400 net earned income for households on UC which was introduced in 2018 and has remained frozen until the next coming academic year.^[31] Each meal is funded with £2.61, or £495 per year across term time.^[32]

Transitional protection has been in place while UC was being rolled out whereby a child who became eligible for free school meals would remain eligible for the duration of that phase of education (i.e. the whole of primary or secondary school) even if they came off UC. Even families who only experienced a temporary drop in their income while their child was in Year 7 and claimed UC could therefore be entitled to five years of support, or almost £2,500 of effective subsidy. For a single parent with two school-aged children, this means that earning £7,399 and keeping free school meals would be financially preferable to earning up to £9,400 or working an extra four hours at National Living Wage per week if they are due to change phase of education.^[33]

In April 2022, eligibility for free school meals was also extended to children in all households with a visa condition of “No Recourse to Public Funds” (NRPF), subject to comparative income caps with families with recourse to public funds.^[34] There is currently no data on how many families have an NRPF condition and therefore no way of quantifying the size of this cohort. Likewise, it is also possible to be eligible for free school meals with parents above state pension age through receipt of Pension Credit Guaranteed Element, but there is no breakdown of how many children are passported via this route. Taking into account those small numbers eligible via these other routes, there are 1.6 million children in total currently claiming free school meals from Year 3 onwards.

From the next academic year, the income cap for qualifying UC claimants will be lifted, meaning that all families on UC will get free school meals, regardless of their earnings.^[35] The Institute for Fiscal Studies suggests that 1.7 million, or 69% of children whose families are on UC who are above the income threshold, will become eligible, as shown in Figure 8.^[36] The Department for Education estimates that more than 500,000 children would be brought into the scheme from next year.^[37] However, due to transitional protection, some of those children will already be in receipt of free school meals despite their families not being in receipt of UC (and potentially earning much higher than the current income cap) so it will likely initially benefit far fewer families than expected.^[38]

Figure 8 – Free school meals eligibility in 2023/24 by number of children and net family earnings

Source: Institute for Fiscal Studies^[39]

Transitional protection is also being ended from the next academic year so eligibility for free school meals will be assessed on the basis of current UC receipt only, although guidance has not yet been issued as to whether this will be checked on an annual basis or each assessment period. The Department for Education does not publish data on the number of children currently receiving free school meals through transitional protection in England. However, the proportion in Wales who were transitionally protected last year was 27%.^[40] Over time, this will become a hugely significant change, not just for eligible families, but also for local authorities allocating funding to the schools they are attending.

In some local authority areas, eligibility for free school meals already extends beyond those covered by existing UC and income threshold rules. In London, the Mayor has extended free school meals to all primary school children, at a cost of £141 million in the current academic year.^[41] While the unit cost per meal is modelled at a higher rate than the national scheme, as around 13% of parents do not take up the scheme, the effective subsidy per pupil evens out to around the same level. Receipt of universal primary school free school meals in London does not affect eligibility for any national passported benefits usually available via this route, which are instead assessed on the national free school meals criteria.

In Wales, free school meals are available on a universal basis to those in primary school, with secondary pupils eligible on the same terms as in England.^[42] They also pay schools more per meal, at a rate of £3.40 rather than £2.61 in England.^[43] The Welsh Assembly will receive Barnett consequentials for England’s extension of free school meals eligibility to all those on UC, but have not yet confirmed whether they will replicate the lifting of the earned income cap for secondary school pupils.

School funding

The radical change in passported benefit eligibility has far reaching implications for schools as a whole because so many aspects of their funding are calculated based on pupil eligibility for free school meals. School funding is not included in the costings for this analysis, but discussed due to the scale of the expenditure that now needs to be increased to match free school meals eligibility or calculated another way.

Pupil Premium funding, which provides an extra £1,480 or £1,050 per primary or secondary school pupil respectively currently on free school meals or any pupil who has received free school meals within the last six years in that phase of education (known as Ever 6 FSM or FSM6). At present, the six year rule means that Pupil Premium funding acts much in the same way as transitional protection, providing the school with the extra funding regardless of whether that pupil’s family has only been very briefly eligible for free school meals.

The effect of changes to free school meals eligibility on Pupil Premium funding is estimated to equate to a loss of £1.5 billion to schools.^[44] However, the Department of Education has indicated it will maintain Pupil Premium levels and other related school funding next year (and possibly longer) while they consider changes to funding allocations.^[45] Unless increased in line with inflation which has not happened in recent years, these rates will erode in real terms while the new formula is developed.

Schools must use the additional funding that they get via the Pupil Premium to “accelerate disadvantaged pupils’ progress, in order to raise their attainment.”^[46] So while not directly tied to individual pupils in receipt of free school meals, there is a reasonable expectation that this funding should follow the pupils through which the funding was made available. Survey evidence from the Sutton Trust found that around a third of senior leaders and classroom teachers said they were using at least some Pupil Premium funding to plug gaps elsewhere in their school’s budgets.^[47] However, there is no evidence to quantify by how much other pupils were being cross-subsidised.

The wider National Funding Formula also uses free school meals numbers as a key deprivation indicator, alongside a neighbourhood level income deprivation score. Children who receive free school meals currently attract £495 and an additional £1,060 or £1,555 at primary or secondary level respectively for FSM6.^[48] Alongside the income deprivation score and with subsequent area cost adjustment, these three rates account for around 10% of schools funding and are the largest single additional needs factor determining how local authorities get to allocate to their schools. From 2027-28, National Funding Formula allocations will go direct to schools rather than going via local authorities, who have tended to weigh more heavily for current free school meals eligibility and less heavily for FSM6 in their final allocations. Again, it has been confirmed that the free school meals eligibility change will not affect the formula from next year, but no timeline or detail has been given on what will replace it as a proxy for deprivation.

Further still, free school meal rates are used to target other programmes through Priority Education Investment Areas and Opportunity Funding. Areas in these schemes are chosen on the basis of pupil outcomes and the proportion of pupils eligible for free school meals. Schools in these local authority areas can benefit from teacher retention payments of up to £3,000 per year, funded National Professional Qualifications (NPQs) ranging from around £900 to £4,000 and funded mentor placements to improve attendance costing around £1,500 per pupil.^[49] This means that in some areas, the benefit to pupils in receipt of free school meals (and their classmates) can be even greater via payments to teachers or effective subsidy to pupils via mentoring. The end of the funding system  associated with free school meals eligibility hence has funding implications that far outweigh the simple cost of each lunch. It may take years before a new un-passported funding settlement emerges, leaving funding out of step with policy.

Free school transport

Children eligible for free school meals are passported an extended right to free home-to-school transport. All children are eligible for free school transport if a child’s nearest suitable school is over two miles away for five to seven year olds or three miles away between eight and 16.^[50] For those in receipt of free school meals, the bar is two miles (rather than three) for those aged eight to 11. For those aged 11 to 16, free school transport for those eligible for free school meals is available if the school is two to six miles away if it is one of their nearest three suitable schools or two to 15 miles away if it is a school chosen due to a religion or belief.

Free school transport is also provided to children with special educational needs, disabilities or mobility problems that mean they are unable to walk to school, regardless of the distance. Case law has interpreted this to include social, emotional or mental health rather than just difficulty with physical movement if it could be seen as unreasonable or unsafe for them to walk or use public transport. This threshold also does not necessarily require that they are claiming child Disability Living Allowance or have an Education, Health and Care Plan (EHCP), although these can both be used as supporting evidence. Hence, while this route to free school transport is not limited to passporting via benefits, receipt of child disability benefits can provide eligibility.

Neither Wales nor Scotland have an equivalent UC-passported extended right for those between two and three miles away from school, despite being more rural and therefore more likely to have a higher proportion travelling longer distances to school. Instead, councils have discretion to give more weight to real world geography, safety and feasibility, rather than use an imaginary radius as the rule. However, both nations have more generous income-subsidies for children of school age which families may use to contribute to transport costs.

The home-to-school transport bill for local authorities in England has soared in recent years, rising from just over £1 billion to £2.25 billion over the decade to 2023/24.^[51] Mainstream home-to-school transport costs have risen by around £24 million since 2015/16 after accounting for the impact of inflation. The median cost per year of providing home-to-school transport is around £1,495 for mainstream transport and £8,920 for SEND transport per receiving pupil.^[52] There is wide variation in how these costs affect different areas on a per capita basis across all their pupils, with spending ranging from just £2 in London boroughs to £57 in county council areas.^[53]

According to a Department for Education snapshot data collection exercise from local authorities in February 2025, 7% of pupils receiving free home-to-school transport were eligible via extended rights conferred via free school meals, equating to 36,400 pupils.^[54] In 2024/25, councils were allocated over £52 million for providing the extended right to free school transport.^[55]

The total amount allocated has increased by almost 30% in the last four years alone. As with school funding, the Government has not yet decided on a new mechanism for assessing eligibility for the extended right to free school transport with the expansion of free school meals to all those on UC, keeping eligibility to the existing income threshold for this year at least.^[56]

Unless new passporting criteria are implemented in the long term, the expansion of free school meals could add significant extra cost. By the same token, more restricted extended rights could drive more to seek SEND-related eligibility, which could increase costs even more. The original per-pupil amounts allocated for extended rights to different local authorities were based on an Association of Transport Coordinators survey a decade ago and only started being uprated from 2021/22.^[57] Even small changes in eligibility or rebasing of rates could cause significant disruption in funding in some council areas depending on their geography.

Eligibility for free home-to-school transport can legally take no account of whether the family could reasonably provide their own transport, including having one or more cars. They also cannot legally take into account whether the state is already paying for that family to have a subsidised Motability car, whether due to a parents’ disability or any child in the household.^[58] 90% of Motability vehicles are leased without any adaptations for the driver or any passengers.^[59]

Holiday Activities and Food Programme

Free school meals-eligible children are also able to access free holiday clubs during the school holidays via the Holiday Activities and Food Programme (HAF).  This programme, funded by the Department for Education, provides activities and meals at holiday clubs, administered via local authorities. Guidance from the Department for Education encourages local authorities to spend up to 15% of their funding on free or subsidised places for children who are not in receipt of benefits related to free school meals but whom the local authority believe could benefit from the HAF, such as those with low school attendance rates. Pupils in year groups covered by universal infant free school meals are covered by standard free school meals eligibility rules instead.^[60] 

The programme was at pilot stage when the Covid-19 pandemic commenced, and during this time, it was expanded across all of England and into multiple school holidays, with some areas now providing half term schemes in addition to the longer school holidays. The expectation for the HAF is that providers operate on a 4x4x4 model – that is, that they offer places for a minimum of four hours a day, four days per week and for four weeks during the summer holidays. Across the 2023 to 2024 academic year, almost five million HAF days were provided with funding of approximately £200 million per year.^[61] During the summer holidays of 2024, 624,000 children took up HAF places.^[62] The Department for Education estimates that HAF helps parents to save over £300 per year.^[63]

Evaluation of the early rollout of HAF found that 58% of clubs with HAF places were also open to children whose families were paying for their place, with 44% citing paid places as an additional source of funding.^[64] Therefore, fee-paying families will often be further cross-subsidising government-funded places, in addition to funding the scheme through their taxes. According to the Coram Holiday Childcare Survey, holiday clubs cost parents an average of £179 per week (for a five day holiday club).^[65] This puts the value of the effective subsidy to parents higher than the DfE estimate of £300 on a pro rata basis. Separately, wholly private holiday clubs have been estimated to cost 21% more than those run by councils.^[66] So in practice, if families taking up HAF-funded places were looking for equivalents on the open market, they would likely pay higher fees than the equivalent HAF subsidy.

When the HAF first became a national scheme in 2021, it was funded with £220 million.^[67] However, in the most recent round of funding announced this August, only £600 million has been earmarked to last three years.^[68] Almost £214 million is already expected to be allocated in 2026/27, meaning that allocations will diminish further in future years unless the total is topped-up.^[69] Growing participation, high food inflation and increasing labour costs will continue to erode funding per place. Given how recently the scheme has been rolled out on a national basis, there are no long term outcomes evaluations yet.

As with other schemes passported through free school meals, the Government has confirmed that those newly eligible once the earnings threshold is removed will not become eligible in the next school year.^[70] This discrepancy will both create confusion from parents seeking to use the scheme and operational complexity for clubs and councils in verifying who is eligible. Beyond next year, funding is likely to stretch even less far over more children, which may further increase cost displacement to fee-paying families.

Vulnerable Students Bursary

For those beyond compulsory school age but still in non-advanced education in England, the 16-19 Bursary Fund provides cash under the Vulnerable Student Bursary to young people in care, care leavers, young parents and those with a UC claim in their own name who are financially supporting themselves or being supported through DLA or PIP. Those under the age of 18 are not usually able to claim UC at all except in the circumstances described above, instead receiving the under 25s rate of standard allowance. The 16-19 Bursary Fund also provides funds to education providers for discretionary bursaries that are usually assessed based on income, cost and need.

Up to £1,200 is available to eligible students under the Vulnerable Students Bursary, with guidance requiring that receipts are provided to show costs or benefits in kind for at least a partial period which can then be multiplied by expected attendance. In 2024/25, awards averaging £720 each went to 23,700 students, costing just over £17 million.^[71] Separately, a Special Support Loan is available to those qualifying for the housing element of UC or certain legacy benefits as part of their maintenance loan for those in higher education.^[72]

The £1,200 maximum was carried over from the Education Maintenance Allowance (EMA) scheme which it replaced in 2011, but it has not been uprated since. EMA provided £10 to £30 per week on the basis of parental income for those earning under £30,000 per year (£53,000 in today’s prices).^[73] Recent longitudinal analysis of EMA by the Institute for Fiscal Studies found no evidence that receiving EMA improved recipients long term outcomes, including their qualification or attendance levels in sixth form or university.^[74] Worse still, EMA recipients had reduced earnings of 1% each year into their late 20s and higher rates of benefit claims. In total, for every pound spent on EMA, only 40p of benefit was derived in the long term, as shown in Figure 9 below.

This analysis provides a rare evaluation of the long term impact of passported benefits on incentives to work that goes directly against early evaluations while it was in its pilot phase. The research indicates that the financial support diverted some young people away from part-time work and work-based training, meaning they missed out on vital skills and experience to set them up for the long term.

Figure 9 – Effect of EMA on earnings and benefit receipt

Source: Institute for Fiscal Studies^[75]

Analysis of the EMA further shows how inaccurate early pilot findings can be when initiating new passported benefits versus how politically difficult they are to reduce or take away even if they are found to be ineffective. Even though the maximum value of the assistance was maintained at the point of the switch from the EMA to the Bursary Fund in England, there were nationwide walkouts from pupils in schools and colleges against its removal, compounding protests against concurrent tuition fees rises. It also serves as a warning to Scotland, Wales and Northern Ireland where EMA still operates that well-intentioned passported benefits can harm the long term life chances of the very people they are meant to support.

There are specific exceptions determining whether and how much UC is awarded as a full-time student. UC for students under 21 is already limited to those in non-advanced education who have no parental support.^[76] The 16-19 Bursary Fund is available beyond 19 if the course was started before age 19. Having a separate bureaucratic process for administering the bursary to such a similar cohort is questionable, especially if it replicates some of the poor long term outcomes seen with EMA.

Extra support childcare

As part of the Government’s childcare hours offers in England, there is an additional 15 hours for parents of two year olds in receipt of UC who have earned income of less than £15,400.^[77] This therefore includes parents who are not working while using the offer. It was recently renamed to the “two year olds receiving support” offer rather than referring to them as “disadvantaged”. It is also available to other two year olds without an income cap if they are in care, have an EHCP or receiving Disability Living Allowance.

This scheme can be used in addition to other childcare offers depending on whether the parents also meet their separate eligibility requirements. This includes being able to claim back 85% of childcare costs through the UC childcare element, up to a cap. As with all hours-based offers, the 15 hours per week is a term time only based offer, so does not equate to 15 hours per week across the whole year, but it does not have to be used exclusively during the school term.

In 2025, there were just under 93,000 families on UC or legacy benefits receiving the additional support hours for two year olds.^[78] Just under half of those pupils also attracted the Early Years Pupil Premium, which means that the childcare provider is paid a higher rate for the free hours used.

Responding to pressure from the sector to increase the rates paid for different age groups, the Government increased the core funding rate for two year olds by over a third.^[79] This gives an average subsidy of just under £6,000 per year per pupil.

Take-up of the offer is around 65% of eligible families, which is lower than the proportions for other childcare hours offers. A study by Nesta in 2023 found that attendance rates among those taking up a place were also six percentage points lower than for their fee-paying peers.^[80]  They were also twice as likely to have very low attendance, with almost a quarter attending for less than 70% of their scheduled hours.^[81]

Health

NHS Help with Health Costs

There are several different routes to eligibility for free NHS prescriptions, dentistry and other medical costs. These include receipt of certain benefits, medical conditions, age, pregnancy or maternity, stage of education, and veteranship. There are several passported benefit routes. For low-income working-age adults, the two main ways to qualify for help with health costs are through an automatic exemption from benefit status if earning below certain thresholds, or the separate NHS Low Income Scheme (HC2/HC3). UC claimants with earned income under £435 per week in their most recent assessment period, or £935 if they are in receipt of the child element or health element, are passported. These are roughly equivalent to a £6,700 or £15,500 gross annual salary, so only UC claimants working less than full time on the minimum wage typically qualify for help with health costs via this route, even at the higher threshold.

The income threshold has a direct impact on work incentives, with only 32% of single working households on UC having consistent earnings below the £435 threshold. Almost 55% of households on UC will lose passported eligibility for help with health costs at least once a year because their earnings go above the £435 threshold, making them liable for a £100 fine if they falsely claim.^[82] Similarly, but less acutely, around 66% of working couples have consistent earnings below the £935 threshold, with 34% losing eligibility at least once a year due to their earnings going above the threshold in at least one assessment period.^[83]

Separate to passported eligibility with income thresholds, it is possible for working age adults to get free prescriptions and other medical items if they meet an income assessment and have limited savings. They can apply for an HC2 or HC3 certificate through the NHS Low Income Scheme to have their prescriptions full or partially covered. An HC2 certificate is available to anyone who has savings below £16,000, or below £23,250 if they live permanently in a care home. An income assessment is made to check whether it is less than that household’s living requirements, up to half the cost of a prescription in England, which is currently £9.90. Those who do not meet the full threshold can get partial help under an HC3 certificate.

There will be UC claimants above the income threshold or with variable earnings who use the Low Income Scheme rather than the automatic passport to get help with health costs, but this is not possible to quantify. NHS Business Services Authority (NHSBSA) do not publish a formal list of thresholds so it can be difficult for applicants to check how much support they will likely receive prior to applying to the NHS Low Income Scheme. However, unlike the UC exemption, if successful, HC2 and HC3 certificates last for a year, whereas the UC exemption only applies if they are under the income threshold in their last monthly assessment period. The National Audit Office raised concern that this can be particularly confusing for UC claimants with variable earnings whose eligibility may vary from month to month.^[84]

In 2024/25, 154,000 HC2 certificates were issued and 87,900 HC3 certificates were issued under the NHS Low Income Scheme.^[85] Over a third of these HC2 certificates were issued to those aged 15-19 or over 60, which are likely to be for items other than free prescriptions given that those cohorts are likely to qualify by age.^[86] There is no published breakdown of how much NHSBSA spends just on administering prescriptions or other medical exemptions and discounts. An investigation by the National Audit Office estimated that between 2014/15 and 2018/19, there was £246 million in outstanding debt to the government through unpaid penalty charge notices for invalid exemption claims, with only £133 million recovered over the same period.^[87]

The interaction between UC and NHS exemptions is therefore especially complex. The UC route is automatic for those with low or no earnings, but it is assessed on the most recent monthly assessment period and can switch off after a single month of higher earnings. The Low Income Scheme is more stable, but requires a separate application to determine whether someone is reasonably able to pay after accounting for their other living costs. For the purposes of the costs analysis, only those going via the pure passported route are counted.

Free prescriptions

Most prescriptions dispensed from community pharmacies in England are exempt from the £9.90 charge. In spending terms, 96% of the total cost of prescribed items are exempted.^[88] That is £10.7 billion exempted versus less than £500 million charged. Hence, prescription charges are really the exception, not the rule. Around 6% of prescribed items are marked as exempted on prescription forms but paid for separately via pre-payment certificates, which offer a fixed rate for three or twelve months. This means those on a 12 month pre-payment certificate pay £114.50 for the year regardless of the number of items prescribed, rather than the estimated average of £267.79 per patient for those prescribed items.^[89]

In 2024/25, just under 123 million prescription items were picked up under a UC exemption, costing £947 million.^[90] When factoring in those on legacy benefits too, this rises to £1.2 billion. There is no breakdown of the average number of prescribed items per person for the UC exemption categories, but the average number of prescribed items per person for those with a legacy NHS Tax Credit Exemption Certificate is 14.^[91] Assuming the same number of prescribed items per person under UC, this would make claimants exempt from approximately £140 of prescriptions charges per year. Prescriptions have been free to everyone in Wales and Scotland from 2007 and 2011 respectively.

There is some indication that prescription charges may be preventing those on low incomes who may be just outside eligibility for income-based prescription charge exemptions from collecting their prescriptions. Analysis by the Pharmaceutical Journal shows that, by decile, areas with the second highest proportion of people on income-related support are not being dispensed items they are prescribed.^[92] This indicates that those likely to be in UC but have higher incomes above the threshold are choosing not to pick up their prescriptions due to the cost of paying. This has changed in recent years since charges ticked above £9, meaning that items not dispensed no longer stack consecutively by decile.

Figure 10 – Number of items marked as ‘not dispensed’ from community pharmacies in each income deprivation decile in England

Source: The Pharmaceutical Journal^[93]

Free dentistry

In addition to prescription costs, UC claimants are eligible for free NHS dentistry on the same basis as free prescriptions or an HC2 certificate. Free and discounted dentistry carries a much higher subsidy than prescription charge exemptions. A “course of treatment” is the NHS billing unit, with patients charged at Band 1–3 rates (£26.80 for Band 1 up to £319.10 for Band 3). Dentists are paid via local contracts using Units of Dental Activity (UDAs), typically around £25–£35 per UDA, and a course of treatment can attract up to 12 UDAs, with the balance of cost met through public funding. Non-exempt NHS patients pay £26.80 for Band 1 treatment, up to £319.10 for Band 3. This is topped up by the taxpayer by more than double the price for each Band.

In total, those exempt via UC or legacy benefits received 3.7 million courses of dental treatment in 2024/25.^[94] In total, this cost £302 million, averaging £81 per course of treatment. Again, there will likely be additional UC claimants claiming free dental treatment via an HC2 certificate due to the income thresholds, but this is hard to quantify.

Help with other health costs

On the same basis as free prescriptions and dentistry, it is possible to claim back other healthcare costs as a UC claimant or an HC2 certificate holder. These include free or discounted sight tests, glasses, contact lenses, wigs, certain travel costs and other medical items. Applying for these involve an array of multi-page paper forms in addition to any HC2 or HC3 certificate application or with manual sign off from the Jobcentre Plus to verify claimant status before going to the NHS BSA. The Help with Health Costs schemes (including prescription and dental exemptions) are so complex even its accompanying plain English guide for patients is 37 pages long of dense text.^[95]

For example, a review of the Help with Travel Costs Scheme, which reimburses transport costs for those referred for specialist NHS treatment or tests, estimated in 2021 that it cost £5-10 million per year, with 500-700,000 claims.^[96]  It highlighted the significant variation across the country in how costs could be claimed back, with some hospitals having cashier desks that could pay on the spot if claimants came with all the relevant documents, but these often had limited opening hours. Claims by post could take 90 days to process, sometimes just for a few pounds of reimbursement. As there is so little published information on take-up or effectiveness of these schemes specifically for those eligible via claimant status, they are not possible to cost in this analysis.

There is no published data on how many claims are made for this assortment of other health-related items, what proportion have their full costs remitted or how many are eligible via the passported route versus a HC2 or HC3 certificate. There are some other isolated data points available, like the total number of vouchers issued for NHS ophthalmic services like sight tests and glasses, but insufficient breakdowns to calculate average or total costs with any certainty.^[97] These other Help with Health Costs items are therefore excluded from the total costs analysis.

Sure Start Maternity Grant

The Sure Start Maternity Grant is a one-off payment of £500 for the first child or for those expecting a multiple birth with existing children.^[98] It is available in England and Wales to those on UC and in certain other limited circumstances. It can be claimed any time from 11 weeks before the due date until six months after the baby is born. It is still administered via a paper form, including evidence of pregnancy or childbirth from a health professional. Paper-based claiming and third-party evidence requirements create avoidable friction and are likely to depress take-up among eligible households, while increasing administrative cost relative to the size of the award.

There were 47,200 grants issued in England and Wales in 2023/24 (the last year for which information is available) at a cost of £23.6 million.^[99] There is no breakdown to show how many people receive the grant for the complex set of criteria listed outside of UC, such as having refugee status or humanitarian protection and claiming for a pregnant teenage family member, though these numbers are likely to be small in comparison to those eligible via UC.

Once part of the much wider Sure Start programme, there has been very little evaluation of the effectiveness of the grant since it was restricted to the first child in 2011. The value of the award has remained frozen since 2002 as one of the Social Fund policies that remained after the Welfare Reform Act 2013.^[100] Its predecessor scheme – the Health in Pregnancy grant – gave women across the UK a £190 cash sum at their 25th week of pregnancy if they had been in contact with a doctor or midwife. In real terms, this means the grant now covers a much smaller share of the typical upfront costs associated with a new baby than it did when introduced. A study of its impact in Scotland found no evidence that it changed birthweight, reduced premature birth or improved maternal outcomes.^[101] It was discontinued in 2011 after just two years.

In Scotland, the more generous Best Start Grant Pregnancy and Baby Payment was introduced after the Sure Start Maternity Grant was restricted to the first child in 2011, which became part of a suite of Five Family Payments at different early years stages. It provides £767.50 for a first child and £383.75 for subsequent children available from 24 weeks of pregnancy.^[102] While there has been some limited evaluation of the collective Five Family Payments in Scotland, there is no consideration of alternative mechanisms for delivering support or their long term impact on outcomes.^[103]

Separate from the Sure Start Maternity Grant, all expectant mothers who have their pregnancy confirmed by a healthcare professional can also get a maternity exemption certificate, which provides them with free prescriptions and dental treatment while they are pregnant and for 12 months after they give birth.

Healthy Start

Healthy Start pre-paid payment cards are available for UC claimants in England, Wales and Northern Ireland with earned income below £408 per month (equivalent to £4,896 per year) from 10 weeks of pregnancy and up to when a child is aged four.^[104] This is a lower income ceiling than the £435 for free prescriptions, free dentistry and other medical items, originally linked to Child Tax Credit thresholds in the legacy benefit system. In May 2021, the scheme was extended on a non-statutory basis to British children in families with No Recourse to Public Funds using only the earned income threshold. The Government is currently considering consultation responses extending this to non-British children too.^[105]

The cards are loaded with £4.25 per week from 10 weeks of pregnancy and for children between the ages of 1 and four.^[106] While the child is under one, the rate is doubled to £8.50. This is equivalent to £221 and £442 per year respectively and unspent balances are allowed to accumulate. In addition, recipients can get free Healthy Start vitamins from certain NHS or local authority providers, such as health visitors, pharmacies and Family Hubs. In Scotland, the Best Start Foods payment, as part of the Five Family Payments, pays the equivalent of £5.40 per week during pregnancy and for each child between one and three years old, and £10.80 during the child’s first year.^[107]

Healthy Start cards are intended to be spent on cow’s milk, infant formula based on cow’s milk, fruit, vegetables and pulses. However, they are simply pre-paid Mastercards that can be tapped like any other card, with the only restrictions being whether the retailer has an accepted Merchant Category Code for the type of shop. Accepted shop types cover supermarkets, convenience stores, pharmacies, markets, petrol stations and more. Guidance to retailers is clear that they are not required to check what someone purchases and that this is entirely the responsibility of the cardholder.^[108] Online forums discuss being able to purchase alcohol, vapes and even Playstations when cards have accumulated sufficient funds.^[109] This is plainly not the intention of the policy.

The scheme currently costs £86 million per year.^[110] In December 2025, there were 354,720 claimants on the Healthy Start scheme in England, Wales and Northern Ireland.^[111] Due to an issue with the data since January 2023, there has been an error in the uptake statistics published, meaning there are no current figures for the proportion of those eligible who are taking up the scheme.^[112] In the last month for which reliable data is available, uptake was 62%, which was well below the Government’s 75% target.^[113]

Evaluation of Healthy Start by the National Institute for Health and Care Research (NIHR) using individual data-linking methods found that take up was low during pregnancy, with an inconclusive impact on birth outcomes among those on the scheme.^[114] Likewise, there was little difference in vitamin intake for those on the scheme when compared with those eligible, but not claiming, or those just outside eligibility. It should be noted that while the study was published in 2023, the fieldwork largely took place before Healthy Start was moved from a paper voucher scheme to a pre-paid card scheme and while the value of the vouchers were £3.10 and £6.20 for the relevant cohorts.

Quite apart from obvious avenues for abuse and lack of tangible health outcome improvement, the earnings threshold has a damaging interaction with incentives to work: 56% of working households on UC with children have consistent earnings below the £408 eligibility threshold.^[115] However, 43% of working households will lose eligibility for Healthy Start at least once a year because their earnings go above the threshold in at least one assessment period. While there is an eight week grace period in which eligibility continues after earnings rise above the threshold, those with sustained or seasonal fluctuations in their income would have to reapply each time.^[116]

Energy

Warm Home Discount

The Warm Home Discount is a mandatory scheme that requires energy suppliers in Great Britain to provide an annual, automatic rebate of £150 to certain households. In England and Wales, eligible households are currently split into two groups.^[117] Core Group 1 consists of households on the Pension Credit Guaranteed Element who are automatically eligible. In 2024/25, Core Group 2 predominately consisted of households in receipt of UC who are also living in a property with a high energy costs score. For 2025/26, the high energy costs score will no longer apply, so all households on UC will be eligible for the rebate from energy suppliers with more than 1,000 customers.^[118]

The changes this winter move away from the previous energy cost scoring system which was determined by Valuation Office data on property type, property age and floor area. No regard was given to Energy Performance Certificate (EPC) ratings, which looks at factors like the building fabric and heating system. This meant that older houses with significant heat retention retrofitting would still qualify, even though they may have low energy costs. Suppliers are also able to spend part of their Warm Home Discount obligation on “Industry Initiatives” outside of the rebates, such as debt assistance, energy efficiency advice or devices and helping claimants access other passported benefits.

Scotland still uses the pre-2022 Border Group criteria instead of Core Group 2, which assesses households on certain benefits including UC according to whether they are deemed to be in or at risk of “fuel poverty”. The assessment of fuel poverty risk is based on the characteristics of the household members rather than the physical house, including whether there are children under the age of five or disabled people living there. Scottish households still have to apply to their supplier to receive the rebate rather than this being automatic.

While the Warm Home Discount is a statutory scheme, unlike most other passported benefits, it does not involve direct government subsidy. Instead, energy suppliers fund the scheme directly by recouping the cost from other bill payers. In 2024/25, £483 million was spent in England, Wales and Scotland.^[119] £340 million of the spend in England and Wales went to almost 2.2 million Core Group 2 households on working age benefits.^[120] 

In the Government’s impact assessment for removing the high cost to heat threshold estimates the total levy will increase costs to energy suppliers by around £400 million to £1 billion.^[121] This was estimated to pass on a cost of £37 to the average dual-fuel billpayer, up from £22 before the change.^[122] This indicates that the cost of UC claimants in receipt of the Warm Home Discount will top £800 million when combining the proportion of existing claimants in Core Group 2 with the estimated cost increase.

Breaking the link to households that are more likely to face higher energy costs, means it is now effectively just an income top-up, paid for by everyone else in higher bills. It is difficult to justify a system in which households who receive no support are required to pay higher energy bills to fund a blanket rebate for everyone who receives benefits, regardless of those households’ actual energy needs. Involving each energy supplier in individually delivering £1 billion of blanket welfare in this way is a hugely convoluted way of effectively taxing suppliers. Meanwhile, the Industry Initiates part of the scheme, which helps households to permanently reduce their bills through measures like energy efficiency improvements, boiler replacements and debt write-offs, is not planned to be expanded.

Energy Company Obligation

Separate from the Industry Initiatives Scheme under the Warm Home Discount, there has been an additional scheme called the Energy Company Obligation (ECO) focused on home heating cost reduction for those in receipt of certain benefits. It is currently in its final phase due to end in December 2026 and is open to those on UC, Pension Credit, Child Benefit (up to an income cap based on the number of adults and children) and those not on benefits in some other circumstances. For home owners, the house’s EPC rating must be below D to be eligible or below E for private and social renters.

Energy efficiency measures include various types of insulation, heat pumps and solar panels, with gas boiler upgrades being taken out of the scheme in its latest phase. Like the Warm Home Discount, it is funded directly by suppliers, requiring them to achieve a total of £224.3 million in annual bill savings for domestic premises.^[123] The average cost of delivery under the fourth phase of ECO is around £22.36 per £1 annual bill savings.^[124]

The scheme has been widely criticised for a range of issues, including suspected fraud, poor quality installations and poor targeting, with a higher than expected number of claims from homeowners.^[125] It has recently been extended from the expected close date of March 2026 to December 2026 as the Government had not yet published its Warm Homes Plan in time.^[126] This has now been published, but with no information about how low-income households will qualify.^[127] Further detail is expected in the spring. In the latest year of the Energy Company Obligation up to September 2025, installations across 71,000 households have cost £1.15 billion.^[128] Not counting the administrative cost of the scheme, this means an average direct subsidy per household of almost £20,000 in installed measures.

A survey of recipients in the third wave of the Energy Company Obligation showed that 16% were in receipt of UC, plus a further 10% on at least one income-based working-age legacy benefit.^[129] An income eligibility cap of £31,000 was introduced for the final wave, but other flexibilities were introduced that could be used to bypass the cap. Using wave 3 claimant proportions as a proxy for the proportion of UC or legacy working age claimants in the latest year of the scheme too, the scheme is estimated to spend £366 million on UC or legacy claimants.^[130]

Separately, the Warm Homes Social Housing Fund (previously the Social Homes Decarbonisation Fund) provides energy efficiency-related retrofitting to social homes, but is not passported via claimants themselves but goes to their landlords. In its current phase from 2025-2028, it has so far allocated £1.2 billion to almost 140 social landlords.^[131] This will fold into the Warm Homes Plan too, but detail on who will be eligible has not been released on this element either yet.^[132]

Cold Weather Payments

If the average temperature falls below or is forecast to be below 0°C for seven consecutive days in a postcode district, eligible households are granted £25 retrospectively through the Cold Weather Payment scheme. Households on UC, and those receiving legacy benefits, Support for Mortgage Interest or Pension Credit, are eligible for these payments under certain conditions. Households must have either a disabled child, or be claiming UC for a disabled adult or a child under five to qualify.

Like the Sure Start Maternity Grant, Cold Weather Payments are another hangover from the Social Fund that ran alongside the legacy benefit system. It is explicit in barring those on UC who are working except if they have a disabled child. The amount of payment may be modest and unpredictable so the actual impact on the incentive to work is unlikely to be significant. Nevertheless, it still adds to the list of bonuses that some claimants get, without any consideration of their property type or whether they have taken any steps to protect their home from the cold.

In the winter of 2024/25, there were 33 cold weather triggers, with just over a million payments made to those on working age benefits.^[133] Due to payments triggers being entirely weather dependent, the cost of the scheme varies wildly from year to year. For the last two milder winters, it has cost £30-35 million, compared to £140 million in the winter of 2022/23.^[134] Averaging across these three years, that gives an annual cost of £68 million. 74% of recipients qualified via UC, therefore costing just over £50 million per year on average for each of the last three years.^[135]

Water

WaterSure

WaterSure is a scheme which reduces water and sewerage bills for metered households on UC or other means-tested benefits if they have a medical need for high water use or three or more dependent children. This final eligibility has sat particularly absurdly alongside the UC two-child limit, which will now be abolished in April 2026. WaterSure usually takes the form of a percentage cap or a set capped value, as set by each water provider.

Since 2015, it has been a statutory duty for water companies in England to provide a WaterSure scheme, with both major Welsh water suppliers also running WaterSure schemes on a voluntary basis.^[136] In Scotland, where Scottish Water is nationalised, there is no WaterSure-style scheme but instead a bill reduction is applied at the same proportion as any council tax reduction the household may be eligible for.

According to the Consumer Council for Water, 260,800 households received an average bill reduction of £325 in 2024/25.^[137] In the same year, it cost suppliers almost £85 million, over double the amount provided in 2017/18.^[138] Customers pay £2-£3 per year extra on their water bills to fund the scheme.^[139] WaterSure is only available to metered customers, meaning that some of those living in flats with a shared supply who may otherwise be eligible cannot be capped. Recent estimates from the Consumer Council for Water suggest that 2 million households are estimated to be in “water poverty” – that is, spending 5% or more of their disposable income on water bills.^[140] SMF analysis of the Living Costs and Food Survey puts this number at around 1.75 million.^[141]

A series of conditions of the skin and bowel typically provide qualification for WaterSure, plus those with renal failure requiring at-home dialysis if not already reimbursed by the NHS.^[142] Reimbursement for one type of at-home dialysis is outlined in the NHS England service specification, although there is no nationally consistent practice for how this is delivered and no auditing of renal unit schemes. England is the only nation in the UK without an nationally consistent health reimbursement scheme across different types of at home dialysis.^[143] This can result in gaps of weeks or sometimes months where a patient starting home dialysis has not had an assessment completed by the hospital and therefore are able to apply to WaterSure, which then lasts for the whole year.

The Government is currently processing responses to the consultation on reforming the WaterSure scheme.^[144] Proposals include extending the list of qualifying benefits to include non-means tested disability benefits for those claiming through a qualifying medical condition (possibly up to an income cap). Together the measures could add significant cost and complexity to the scheme, which is hard to quantify before decisions within the options have been made.

There is no breakdown of the proportion of those claiming WaterSure that are above state pension age claiming via Pension Credit. The Consumer Council for Water states that roughly two thirds of WaterSure claims qualify via the medical route.^[145] Given that the number of claiming households above state pension age with three or more dependent children is likely to be negligible, it is reasonably safe to assume that at least a third of spending on WaterSure is going to those qualifying via UC or legacy working age benefits.

Water social tariffs

Water social tariffs were first introduced in 2009, requiring every water company in the UK to provide a discounted tariff for vulnerable customers, but with broad discretion over how this is delivered. As with WaterSure, eligible customers usually have to apply to their provider rather than receipt being automatic and some exclude those already receiving assistance from WaterSure. South West Water, United Utilities, Dwr Cymru and Affinity Water use benefit receipt as a passport to a water social tariff alongside other criteria.^[146] Assistance is broadly either a proportional bill reduction ranging from 15% to 90%, or a bill cap varying from £66 to £450, depending on the water company.^[147] In 2024/25, almost 2 million customers had their bills reduced by an average of £190.^[148] This cost suppliers a total of £374 million in the same year and is projected to rise to £640 million a year by 2030.^[149]

Figure 11 – Average social tariff savings by type of social tariff

Source: Onward analysis of Ofwat and Social Market Foundation^[150]

Due to the differing structure of social tariff schemes across suppliers and their regional monopolies, there is a postcode lottery as to how much support is provided and how much cross-subsidy other customers pay. Ofwat estimates that by 2030, Thames Water customers will be subsidising social tariffs by an average of £55 per customer, compared to just £13 per customer for United Utilities (the lowest subsidy amount among water and sewerage companies rather than water only companies).^[151] However, United Utilities is also the company with the greatest projected increase in the proportion of customers on a social tariff in the next five years, increasing by 10%, due to their tariff being tied to benefit receipt and applied without customers having to individually apply.^[152]

Limiting just to the providers that tie eligibility directly to UC, legacy or Pension Credit receipt, rather than a separate income and expenditure or bills-to-income assessment, water social tariffs provide £78 million in financial assistance reaching approximately 300,000 properties in 2024/25.^[153] The average bill reduction that households from these providers received last year was £244.^[154] There are no published statistics on what proportion of those in receipt of these social tariffs are on working age benefits versus pensioner benefits. 

There have been widespread calls from charities to move to a single social tariff, including calls for an auto-enrolment scheme on a bills-to-income ratio. The Social Market Foundation modelled three different ways in which this could operate, costing between £460 and £790 million, or between £18.45 to £31.30 per customer.^[155] Bills-to-income schemes would all require significant changes to data sharing with water companies and may require changes to the Digital Economy Act.^[156] 

However, any change of this nature, especially an increase in the amount that customers are cross-subsidising social tariffs, is likely to be unpopular against a backdrop of rising water bills. In recent research by the Consumer Council for Water, over half (52%) of respondents said that it was unacceptable for social tariffs to be funded through other customers’ water and sewerage bills, with less than a third (32%) responding that it was acceptable.^[157]

The cost displacement challenge will become all the more acute given the need to invest in water infrastructure. In the 2025-2030 price review period, water companies are set to spend £104 billion to reduce leakage of both fresh and wastewater, and improve overall water supply.^[158] This amounts to a £31 average bill rise for customers before inflation. Around 40% of customers thought that water bills would be difficult to afford for them after they were shown their company’s proposed bill increases for 2025-26 to 2029-30, based on Ofwat’s draft determinations.^[159]

Telecoms

Broadband social tariffs

Broadband social tariffs are a more recent development than other utilities. BT first offered a social tariff in 2011, before the Government more widely encouraged their provision on a voluntary basis in 2022. All major providers now offer a form of discounted social tariff rate, usually available to at least those on UC and Pension Credit.^[160] There are no mandatory price, speed or availability rules, but most packages are above an average speed of 30 megabits per second considered “superfast”.^[161] By June 2024, social tariff uptake had reached 506,000 customers, up a third on the previous year.^[162] Some telecoms companies also now offer social tariffs on 5G mobile phone contracts too, though SIM-only deals from smaller providers are likely to be cheaper.

Available broadband or 5G social tariffs currently range from £10 to £24 per month, with an average annual subsidy of £200 for those notionally available across all of England and Wales (although some may have local limitations).^[163] This is roughly half the price of the annual yearly spend on fixed broadband with the same provider on the closest commercial tariff.^[164] Ofcom does not publish figures on how much providers spend in total on broadband social tariffs or how much cost they pass on to other consumers. There is also no breakdown of take-up by passporting benefit, but Ofcom uses UC as a proxy for all eligibility in their yearly pricing trends analysis.^[165]

Despite the increases in those claiming, Ofcom indicates that just 9.6% of those eligible were claiming a social tariff in 2024.^[166] According to analysis by Policy in Practice, broadband social tariffs were the most under-claimed passported benefit, with over 7.5 million eligible claimants estimated to be missing out on broadband social tariffs, with a total value of £1.5 billion.^[167] Given the relative recency of social tariffs entering the broadband market, awareness and lack of obvious advertising appear to be holding back uptake. Research from the Citizens Advice Bureau indicates that high exit fees from existing contracts are also a factor preventing people from switching.^[168] It is likely this impact may lessen over time as those now aware of social tariffs naturally come to the end of higher price contracts and are able to switch without penalty.

BT dominates the social tariff market with over 60% of take up. This is despite the fact that its lowest cost plan only for those on UC with no earned income is £16 per month is higher than other social tariff providers, including some of those available nationally. Coupled with the fact that social tariffs are often poorly marketed by other providers, it appears that claimants are not aware that they should still shop around for the best rate, whether it is a social tariff or not.

Legal & financial

Legal aid

Civil non-contributory legal aid is passported to those in receipt of UC, Pension Credit Guaranteed Element and legacy working age benefits, avoiding the usual income means test.^[169] Those not in receipt of benefits need a gross household income of less than £31,884 per year (unless they have less than four dependent children, which then raises the threshold).^[170] If their income is below that threshold, only then do they progress to a disposable income test, with a sliding scale between £315 to £733 which determines how much they may be required to pay towards their costs. The threshold has not been changed since 2009 and therefore those eligible outside of benefit-related passporting has significantly declined as wages have inflated. All civil legal aid applicants, including those on UC also have to pass a means test of their disposable capital, usually up to £8,000.^[171]

As with all routes to legal aid, only particular types of cases are within scope and cases must also meet merits-based criteria. UC passporting therefore means that some higher-earning UC claimants are eligible for full civil legal aid while lower-earning non-UC claimants are ineligible or would have to contribute to their costs.

For criminal legal aid, there are different eligibility assessments depending on where the case is being heard. At Magistrates’ Court, advice and representation for those earning less than £12,475 automatically attracts legal aid, and those earning up to £22,352 have their disposable income assessed. For Crown Court criminal legal aid, income does not determine access to legal aid, but does determine how much contribution defendants have to pay if they are convicted.

While there is no formal disregard of benefit income for criminal legal aid income assessments, defendants on UC are usually treated as having insufficient disposable income to pay contributions. This means that, for example, someone working 40 hours per week at the minimum wage earns too much to be eligible for criminal legal aid unless they were claiming UC too.^[172] As legal aid is almost always granted in the Crown Court, some defendants who do not qualify for legal aid in the Magistrates’ Court choose trial in the Crown Court, because otherwise they would not be able to afford legal representation.^[173]

In 2019, the Government launched the Legal Aid Means Test which aimed to re-base thresholds that had not been uprated in line with inflation and expand access for vulnerable groups.^[174] It consulted on a series of changes, including making households on UC with more than £500 per month earned income undergo an income assessment. In the accompanying Impact Assessment, it is estimated that this threshold would result in only 73% of currently passported individuals being in receipt of non-contributory civil legal aid. It proposed continuing to passport all recipients of UC through the income assessment for criminal legal aid.^[175] While these recommendations from the review were accepted in 2023, the secondary legislation required to bring them into force has not yet been laid, but is expected this year.^[176]

In England and Wales, 20% of the adult population in 2022 were estimated to be eligible for non-contributory civil legal aid under a scenario of full UC rollout with no income assessment for claimants.^[177] There is no further publicly available breakdown to show how many of those eligible received legal aid and whether this was passported through UC or via an income assessment. In 2024/25, the Legal Aid Agency spent £2.1 billion, just over half of which was on criminal legal aid and the rest civil legal aid.^[178] In the same year, the Legal Aid Agency processed 380,000 applications for legal aid.^[179] Some costs counted as legal aid are not borne via income assessed routes, such as free advice available to all from the duty solicitor at police stations, but it is difficult to separate these costs.^[180]

There are no published breakdowns of the current proportions of each type of legal aid that are passported versus income-assessed. According to an independent review of criminal legal aid in 2021, around 45% of applications are automatically passported for legal aid since the defendant is receiving UC.^[181] Using this proportion as a proxy for civil legal aid too, approximately 145,000 claims a year via the passported route, costing £472 million per year.^[182]

Court fee remission

In addition to legal aid, for cases that typically incur court, hearing, appeal or some tribunal fees, UC claimants are automatically eligible for full fee remission. It has been provided through the “Help with Fees” scheme through HM Courts and Tribunals Service since 2013. Those not in receipt of UC or Pension Credit Guaranteed Element have to pass an income test, but this is based on gross household income rather than the disposable income measure which applies for legal aid. For a single person, the monthly income limit is £1,420, rising to £2,130 for a couple and then an extra £425 for each dependent child under age 13 or £710 for those 14 and over.^[183] Again, it is perfectly possible for an eligible household on UC to receive well over the income limits in their UC payment once factoring in housing, health and other elements.

In 2022-23, the Government consulted on a range of changes to the Help with Fees scheme, including measures that would have seen eligibility more closely aligned with legal aid means testing, which was under review at the same time.^[184] This included abolishing the previous earned income test for UC claimants which removed passporting for those who earned more than £6,000 per year.

A capital test applies to all fee remission, which is different to the legal aid capital test. There are limits of £4,250 for fees under £1,420 up to £16,000 for fees over £7,000.^[185] Most fees are well under £1,420, with the highest common fee being £612 for divorce.^[186] Alongside a range of options, proposals to bring the capital limits in line with legal aid were rejected, leaving the capital limits at the same level as they were at the introduction of the scheme in 2013.^[187]

There is no routine publication of the amount of revenue lost to fee remission each year. In 2021-22 (prior to eligibility changes in 2023), remission was equivalent to £81 million, which was 11% of the total value of fees charged.^[188] There were just over 122,500 recipients of partial or full remission in that year, giving an average remission value of £661 per recipient.^[189] Since then, the removal of the £6,000 earned income test for UC recipients has widened this route for passported eligibility, taking the proportion eligible for full fee remission from 93% to 99% of passported recipients.^[190]

Funeral Expenses Payment

A Funeral Expenses Payment is available in England and Wales to those on UC to cover necessary burial or cremation costs, reasonable travel costs plus up to £1,000 for other funeral-related expenses. Applicants must be the nearest responsible relative for the deceased and on UC or Pension Credit to qualify. The amount available for burial and cremation costs is uncapped, as are reasonable travel costs that the claimant may incur to arrange the funeral or travel to the funeral itself. Costs are then recovered in full or in part if there is an estate of the deceased from which to recover them.

The rules on the nearest responsible relative are set out in Social Fund regulations, which assess which relative is closest in a hierarchy from spouse through to close friend. If there is more than one relative with the same relational closeness but not on UC, they are deemed responsible for paying unless specific evidence of estrangement, abuse or incapacity can be provided. This can leave a UC claimant with the closest interpersonal relationship with the deceased making the arrangements and ineligible for a payment even if the other relation deemed responsible for paying refuses to cover the costs of the funeral. As Funeral Expenses Payment claims are usually lodged retrospectively up to three months after the funeral has taken place, some claimants unexpectedly find their claim has been denied even if they were the primary carer for the deceased.^[191] In 2024/25, 1,000 applications for Funeral Expenses Payments were refused due to not being deemed the closest family member.^[192]

For those who die with no arrangements or anyone willing to pay, public health funerals are provided by the local authority. Close family or friend attendance can be requested alongside a brief service but this is granted at the council’s discretion. Again, costs are recouped from any significant estate. Around 2% of all funerals are paid for at least in part by some form of Government grant.^[193]

In 2024-25, £52 million was spent on Funeral Expenses Payments, with just £700,000 being recovered from estates.^[194] According to SunLife’s annual Cost of Dying report, of those who receive a Funeral Expenses Payment, it covered only around 46% of total simple funeral costs in 2025.^[195] There has been no routine publishing of application and award statistics for the Funeral Expenses Payment since the Social Fund Annual Report was discontinued after 2020/21. A written answer to a parliamentary question in February 2022 indicated that around a third of the 3,400 applications submitted on average per month in the previous year were rejected.^[196]

In September 2020, Scotland diverged from England in Wales, replacing the Funeral Expenses Payment with a more generous Funeral Support Payment. While eligibility is still passported via UC, there is greater discretion over the nearest responsible relative tests if the claimant is the de facto funeral organiser. Burial, cremation and travel costs are paid separately at cost as they are in England and Wales, but a higher contribution is required if the deceased had a funeral plan.^[197] These rates are uprated by CPI each year, while Funeral Expenses Payments only increased to £1,000 in 2020 as a one-off increase and the first time rates had increased since 2003.^[198] According to Scottish Government evaluation of Funeral Support Payments from 2019-21, 77% of recipients were below state pension age, therefore likely qualifying via UC or legacy working age benefits.^[199]

In addition to Funeral Expenses Payments, the DWP also administers Bereavement Support Payments UK-wide to working age spouses of the deceased or cohabiting partners with dependent children, so long as they had paid National Insurance contributions for at least 25 weeks in any one tax year before they died.^[200] This is intended as income replacement for lost household income rather than cost reimbursement and is not contingent on benefit status. It starts with a lump sum of £2,500 for those without dependent children, or £3,500 for those with dependent children, with monthly payments of £100 or £350 continuing for 18 months.^[201]

While Bereavement Support Payments and Funeral Expenses Payments serve different cohorts, it is worth noting that some UC claimants paying for funeral arrangements for a loved one will receive both, while others may receive neither. Many will be unaware of their eligibility and the total value of support they will get until well after immediate costs have been incurred.

Help to Save

Help to Save is a UK-wide savings scheme run by the government which allows working UC claimants to receive a 50p tax-free bonus from the government for every £1 they save over four years. Until April last year, the bonus was paid in two installments according to the highest balance saved at any point at the first two and the last two years each, even if withdrawals have reduced the balance by the point of bonus payment.^[202] The maximum amount that can be deposited each month is £50, meaning that the maximum bonus possible over the four years is £1,200. Accounts remain open and pay bonuses for the full four years regardless of whether claimants come off UC during that time.

Help to Save cost £45 million in 2024/25, with just under 200,000 claimants due to receive a bonus from accounts opened two and four years prior.^[203] The average deposit paid in each month of 2024/25 was £48 per month, showing the intention of claimants to maximise their payout.^[204] However, the average bonus paid out for those who opened accounts that reached year two or year four in 2024/25 was just £227. This figure is likely to be depressed by the high number of claimants who open an account but never pay any money in, who total 36,000 since the scheme began in 2018.

In April 2025, an earnings floor which stipulated that claimants had to have at least £793 earned income in their last monthly assessment period was reduced to £1, so the scheme is now open to all those working on UC.^[205] Rather than paying out every two years, Help to Save will now pay out every six months and will be based on net contribution rather than the highest balance.

There is only one month of data available since the change, which saw account opening almost double month on month, although there have been other spikes coinciding with communications campaigns.^[206] While those with lower earnings may be less likely to pay in the maximum amount, the total eligible population has increased by 16%.^[207]

A government-commissioned evaluation of Help to Save published in November 2025 (assessing the period before the change in scheme design) shows mixed results about whether savings habits were likely to be sustained long term, as per the scheme’s stated purpose.^[208] On the one hand, 84% of those who had come to the end of their four years on Help to Save reported that they were more confident that they would be able to continue their savings habit for 12 months or more. At the same time, around a third of previous scheme beneficiaries also reported that they would either save less money (33%) or less frequently (30%) than before Help to Save.

More concerningly, the same report indicated that when those who had received Help to Save bonuses were asked what they did with the money, the most common response was that they used it to pay off debts or bills, with over a third (35%) reporting this use.^[209] It suggests that rather than using their disposable funds to incrementally pay off debt or arrears, they may have been letting interest accrue while waiting for the generous biennial payout. This is perfectly rational behaviour within a scheme with such a generous subsidy while also protected from the full burden of their debts by cap on deductions taken while on UC. However, it may be embedding distorted behaviour that is unsustainable outside of UC, with no savings accounts on the private market offering anywhere near the same returns and a far more punitive debt collection regime.

Local

Council tax support

Since 2013/14, local authorities have been required to set up their own council tax support schemes detailing eligibility and reduction amounts. Only reductions for certain types of pensioners are mandatory. For most schemes, UC claimant status forms part of the eligibility route for council tax reduction. This typically includes full or higher reduction for those in the limited capability for work conditionally group, or with no or low earned income.

The default model for council tax support involves tapering support above a set threshold, usually at a 20% taper rate, with three quarters of council tax support schemes in England structured in this way.^[210] The other quarter set income bands within which there is no change in support. As council tax support is delivered outside UC taper, this additional taper can lead to very high marginal effective tax rates, especially for those earning above the personal allowance. These disincentives to work are magnified for those with fluctuating earnings, with 1.4 million households estimated to be impacted by in-year changes in council tax support in councils using the default model.^[211]

Local council tax support was previously provided through Council Tax Benefit which operated under a single national set of eligibility and award criteria, sharing means-testing rules with Housing Benefit. Until 2013, councils were fully reimbursed by central government for the reductions, regardless of local council tax rates. After an initial 10% cut in funding when local council tax support was introduced, central government funding for these schemes has eroded significantly as local government finance settlements have been squeezed.

From UC’s inception, there was a clear intention to roll council tax support into UC payments. The Local Government Finance Act 2012 even required there to be an independent review into the council tax reduction schemes provided by councils, including recommendations on whether such schemes should be brought within UC.^[212] However, by the time of the review’s publication and government’s response to it, there had been a wider policy shift towards localism which favoured local fiscal responsibility over a centrally set system.^[213] Alongside the migration to UC simply being too slow to consider a new workstream on merging with council tax support at the time, plans to roll the two together were formally dropped in 2018.^[214]

Local council tax support schemes vary widely, with most introducing minimum council tax payments for those receiving a reduction. Analysis by the IFS in 2019 found that the average minimum payment was 19%.^[215] Welfare reforms implemented at a national level during the last Government have also been incorporated in scheme design by many councils, such as introducing a two-child limit, a freeze in benefit rates and the minimum income floor for the self-employed.^[216]

There is also significant variation between UK nations. In the average local authority in England, a family with an average council tax liability receiving maximum council tax reduction would have to pay £248 per year, compared to zero in Scotland and Wales.^[217]

To add to the confusion claimants’ face, council tax bills are calculated on an annual basis, while eligibility for council tax reduction can change from month to month. Research by the University of Bath interviewing claimants in receipt of council tax reduction found that councils using HMRC real time earnings data to determine eligibility could put claimants on full reduction one month and into arrears in the next.^[218]

The postage cost alone of issuing new bills due to fluctuations in income that trigger different support rates is estimated to be up to £16 million per year.^[219] In the last quarter for which local council tax support statistics are available, there were 2,288,079 working age local council tax support claimants.^[220] Policy in Practice estimates that the average yearly claim for council tax support from those on UC is £1,200 in England, with a take-up rate of 62%.^[221]

Flexible Support Fund

The Flexible Support Fund is a discretionary scheme accessed through the Jobcentre Plus which allows work coaches to grant cash to help UC claimants pay for the costs of finding or starting work. This includes expenses like travel to interviews, interview clothing, training and upfront childcare costs. There is very little publicly available information about how it is spent. According to DWP’s projection of spending for 2024/25, it was due to cost £117 million.^[222]

Crisis and Resilience Fund

From April this year, major consolidation of discretionary support is coming through the new £1 billion Crisis and Resilience Fund, which rolls together Discretionary Housing Payments and the Household Support Fund. It will provide local authorities in England with funding to support low-income households who “encounter a financial shock and to support activity that builds individual and community financial resilience.”^[223]

Guidance on the new Crisis and Resilience Fund sets out a largely narrative account of problems that a potential recipient could have and general commentary on what support could look like.^[224] The new guidance replicates failures in its predecessor schemes that do not properly distinguish between whether the crisis is an unforeseen one-off event versus the result of a structural deficit in that household’s income and outgoings. There is no defined framework for assessing whether a circumstance demands a temporary cashflow bridge to avoid falling into deficit rather than up-front assistance to move the household to a more sustainable financial footing in the long term.

Discretionary Housing Payments

Previously, the Discretionary Housing Payment was a scheme which expanded rapidly after welfare reforms were implemented in 2013. Claimants had to be in receipt of housing benefit or the UC housing element to be eligible. In the new Crisis and Resilience Fund guidance, it is not specified whether this will remain a scheme passported only to those on housing-related benefits. It also mentions mortgages as a priority debt, which could blur whether it can be used instead of a Support for Mortgage Interest loan.^[225] In 2024/25, £106 million was spent on just under 150,000 Discretionary Housing Payment payments.^[226] Based on evaluation of the scheme published in 2024, roughly 93% of which are estimated to have been received by recipients of working age.^[227]

Receiving Discretionary Housing Payments directly distorts the intentional incentives of the 2013 welfare reforms to make sure that claimants are renting properties of an appropriate size that they can afford within their benefit award – and to move if this is unaffordable. In the last year, 61% of support provided through the scheme was dispensed to claimants for the express purpose of mitigating the impact of welfare reforms, such as the removal of the spare room subsidy, Local Housing Allowance shortfalls caused by a freeze in rates and the benefit cap.^[228] Less than a third was used by recipients to help secure alternative accommodation through rental deposits or cover short term rental costs while waiting to move. By dampening the incentive to move, the payments are causing long-term dependence on discretionary support. In the 2024 evaluation of the scheme, 83% of those who were receiving a Discretionary Housing Payment had received more than one in the last two years.^[229]

Household Support Fund

The Household Support Fund was established in 2021 during the Covid-19 pandemic as an emergency measure to get support to household costs during a time of uncertainty and inflation. As it evolved from the Covid Winter Grant Scheme, it was deliberately vague in design so that councils could use it flexibly to relieve rapidly increasing demand. It was originally meant to last for six months, but was steadily extended and became effectively permanent.^[230]

The Household Support Fund was allocated £742 million in 2025/26, but there is no data on what proportion goes to UC claimants as councils are not required to share this in their management information.^[231] Evaluation of the previous phase of the scheme showed that 60% of respondents surveyed about use of the Households Support Fund were in receipt of UC.^[232]

Local schemes

In addition to council tax support, many local councils offer their own passported schemes for UC and other benefit claimants on a wide array of leisure, cultural, transport or other service discounts. These are provided at the discretion of each council but outside of statutory local welfare which councils administer, such as the Household Support Fund and Discretionary Housing Payments. A significant proportion of UC claimants in some areas may therefore be receiving multiple non-essential free or reduced cost services while paying no or little council tax to the council providing these concessions.

Following Freedom of Information requests submitted to every council in England and Wales, Onward analysis found that the most common type of passported scheme offered were leisure centre concessions, often in the form of a discounted membership card scheme.^[233] Some offered free or discounted access to spa facilities, mini-golf, theatre workshops, cinema tickets and beach hut hire. While some of these were provided by Local Authority Trading Companies, for which the council may recoup costs from increased use of facilities, others were provided through paid partnerships with external companies where councils are paying the difference.

It was clear from the many partial or non-responses that the same issues of diffuse responsibility seen with multiple central government departments involved in administering passported benefits was replicated at a local level. Even with the volumes far lower than national schemes, some councils were not coordinating their offers in a way that would flag who was missing out on extra support or who may be drawing a significant amount of council funds.

Example claimants

Below are two illustrative examples of claimants and the passported benefits they would receive. They are intended to show how much those with different household compositions can claim. As explained above, many claimants do not access all of the schemes to which they are eligible for a wide variety of reasons.

These fictional but realistic examples are intended not to cast judgement on those who claim or to give the most extreme possible cases, but to demonstrate how irrational it can be for claimants in specific but normal circumstances to come of UC entirely due to the scale of the additional benefits they would likely lose. Costs are based on the average or specific values relating to their circumstances of these awards as outlined above.

Example 1: Single parent family with three children  

Jenny is 38 and lives with her three children aged 2, 8 and 11. She has been on UC since her husband left her and works one day a week around looking after her children. She earns the minimum wage and wants to increase her hours as her youngest has settled into a nursery.  

Because she claims UC, two older children receive free school meals and go to a club funded by the Holiday Activities and Food Programme in the school holidays. As they live 2.8 miles from her oldest child’s secondary school, they get picked up by a free school bus.

She has a Healthy Start card for her youngest and uses the offer of 15 hours of free childcare for children aged two with extra support. During Jenny’s divorce earlier this year, her court fees were remitted.  

As Jenny has three children, she gets her water bill capped by WaterSure. In the winter, she got a Warm Home Discount rebate and she’s also recently switched to a broadband social tariff. She receives full council tax reduction.  

This year, she received £11,781 in additional benefits and benefits in-kind outside of her UC claim. If she worked enough to come off UC, she is unlikely to be able to claim any of these benefits, losing £11,169 in effective income per year (not including her one-off court fee remission).

Example 2: Single man with no children

Ben is 44 and has been claiming UC since struggling to find sustained employment while suffering some ill-health.

He lives in a privately-rented property that has an Energy Performance Certificate rating of E, so he recently had a series of energy efficiency measures installed through the Energy Company Obligation scheme.

He received a Warm Home Discount rebate and a Cold Weather Payment, following a week of especially low temperatures. Ben had some routine dental work done earlier in the year. He is also on a water social tariff and a broadband social tariff.

This year, he received £20,588 in additional benefits and benefits in-kind outside of his UC claim. If he worked enough to come off UC, he is unlikely to be able to claim any of these benefits, losing £734 in effective income per year (not including his one-off energy efficiency upgrades and Cold Weather Payment).

Recommendations

This section sets out a principles-based foundation for reform of passported and discretionary welfare. It goes scheme-by-scheme to recommend how each could be consolidated, altered or abolished, alongside internal changes to help the Government regain a grip over the system as a whole. There will be significant winners and losers, just as there are under present fragmented passporting schemes. This radical rationalisation makes these trade-offs as active decisions, rather than leaving them as passive series of unintended consequences.

Principles for reform

1. Certainty – claimants should know they will be better off in work and working more. This is not a new principle, but a return to the original intent behind UC. The path from welfare to work should be as smooth as possible, with a clear net benefit felt from every extra pound earnt. There should neither be hidden cliff edges along the claimant journey, nor a precipitous fall in effective income when coming off UC altogether. The calculation needed for claimants to see they will be better off should be as easy to understand as possible. It should reward applying for jobs and progressing, not applying to every arm of the state for an extra handout.

2. Consistency – claimants should face the same household budgeting dynamics as others. While the first principle regards income, this principle considers costs. The current system creates two separate worlds – one in which claimant households face daily living costs that are dictated by bureaucrat-created schemes, while other households have costs displaced onto them to pay for such schemes. Across a period of significant price changes, many legacy thresholds have remained and uprating decisions have been sporadic at best. Giving claimants an entirely different set of basic living costs to those just beyond benefit eligibility makes that transition into financial independence much more difficult. The budgeting dynamics that claimants experience should as closely resemble those they will face outside the benefit system as possible, allowing them to gradually adjust their outgoings to reflect their circumstances.

3. Simplicity – only support not possible to target within UC should be delivered elsewhere. Tying the first two principles together, an award-first approach should be adopted to all government support for this cohort. Additional income replacement deemed necessary for all should be delivered through the standard allowance, that for families with children through the child element or childcare element and so on. If it is not an income-replacement measure, it should not be tied to UC receipt at all. Only exceptional one-off costs should be dealt with separately, but still with a set of rules that interfere with the first two principles as little as possible and encourage claimants to build their own financial resilience through work. By rolling more into UC, support will reach more of those currently missing out rather than prizing those able to navigate the bureaucracy.
   

Policy recommendations

1. Measure income and outgoings in the same dataset.

What gets measured gets managed. The lack of accurate data to show a total net view of household income and costs has warped policy decisions for decades. The fact that the vast majority of passported benefits are not included anywhere in the Family Resources Survey – whose very title indicates that it is meant to give a complete picture of all the resources families have at their disposal – means that resultant poverty metrics give a distorted view of relative need across the income distribution, and distorts the distribution itself. It is imperative that the government holds accurate, up-to-date information on both household income versus expenditure as well contribution versus receipt in a single dataset.

a. Rationalise duplication across government-funded income and costs surveys.

Having so many different passported benefit schemes makes it virtually impossible for those responding to the Family Resources Survey to accurately state their total income even if they were asked for this information. The survey is already experiencing falling response rates, which are at least in part due to length and complexity, now taking over an hour to complete the survey on average.^[234] Therefore it is not desirable to seek better data on passported schemes by simply adding more questions; existing questions need to be substituted or removed. For starters, the extensive section on food security should be removed, not least as the National Diet and Nutrition Survey already asks more granular questions about food consumption by income and household composition.

b. Link data from the Family Resources Survey and the Living Costs and Food Survey. 

The Living Costs and Food Survey collects diary-based data on household spending patterns, but no information on claimant status or costs met through benefits in-kind. It too falls victim to a disproportionate focus on food at the expense of drilling into other living costs that drive the ability to afford it. The Family Resources Survey and the Living Costs and Food Survey responses do not directly link, meaning there is no complete picture of income versus outgoings.  

While still gathering information on essentials that households may go without, questions should principally seek to uncover the causes rather than fixating on the symptoms of particular missing resources. A detailed review of both surveys in tandem should be conducted, aimed at harmonising responses into a single dataset on household income and expenditure. This should reveal richer data about the budgeting, cashflow and structural deficits that lead to decisions to economise on or not consume some essentials. In turn, more accurate metrics for measuring resources, deprivation and poverty can be developed with this information, and policy adjusted accordingly.

2. Improve internal data collection, sharing and systems.

Modernisation of the data architecture underlying Government departments is long overdue. Claimants spend vital marginal effort that could be used seeking work filling in endless forms to provide the government with information that it already holds, just not in an accessible place. Bureaucrats fill the void between datasets, existing at the expense of taxpayers simply to pass information to each other. More still is wasted correcting errors, investigating fraud and developing duplicative policy.

It is perverse that the government is most efficient with sharing personal data across public services after death. The “Tell Us Once” service cascades information through a notification system across DWP, HMRC, local authorities, the Passport Office, the DVLA and more from a single trigger. This approach should be the rule, not the exception, for all changes in circumstance which alter the level of support someone is eligible for.

The complexity of data collection for this paper’s scheme-by-scheme analysis and the assumptions that needed to be made point to the dearth of easily comparable information on billions of Government spending. Without this data, evaluation of passporting policies will remain limited and ministers will continue to make well-intentioned, but suboptimal decisions. A multi stage solution is proposed

a. Use a standard format for collecting management information from schemes.

This should include claimant characteristics, eligible populations, the range of award values and total expenditure. It will help track who is benefitting from different schemes, whether they are competing against each other or incentives to work, if they need re-basing or uprating and the total burden on taxpayers. Where possible, this should be cross checked against external datasets too, like that gathered by credit reference agencies.

b. Mandate a consumer costs review on departments with passported benefits.

Just as the sufficiency review seeks to uncover downstream costs, this looks at what can be done upstream. Every Government department responsible for administering or owning regulation for a passported scheme must produce a consumer cost reduction plan. This should set out all of the policies that contribute to essential household costs. Each department must identify supply side measures to reduce households costs up to the equivalent of the average cost of the passported subsidy.

There can be some horse-trading between departments as to who bears the responsibility for costs, such as the Department for Education asking the Department for the Environment, Food and Rural Affairs to address food to meet the requirement for free school meals. But the key is that measures identified are specific, costs are realistic and changes are deliverable.

It sets out a clear deregulation-first, business tax-reduction approach to reducing living costs for everyone. The higher the subsidy, the harder officials will have to work to peel back layers of bureaucracy they have created that are causing living costs to be so expensive. The department will only cease to be subject to the review once changes that deliver household savings equivalent to the average value of the subsidy to claimants have been identified.

c. Implement a federated data system across public services.

In the longer term, the only sensible way to manage data from schemes is to develop a proper federated data system across public service policy departments. Systems like this have started to be used in the NHS and in some local authorities, but their true potential can only be reached through wider adoption to link data across services. This will both give the Government better visibility over its policy decision as well as a wider range of policy choices. At once, it allows micro-targeting to specific cohorts and reduces the need for additional schemes at all by getting more help to all those intended in the first instance.

A cross-government public service federated data platform could take this a step further, bridging the gap to those who are most in need of support but have the least capacity to seek help and therefore fall through the cracks of fragmented passported schemes. In an instant, information about households and individuals can be retrieved, need isolated and support delivered as appropriate. It would revolutionise the way that policy is designed, starting from a point of maximised reach rather than duplicating for the same essential purpose.

d. Develop a benefit calculator that shows participation and marginal effective tax rates including passported benefits.

It is a sign of just how fragmented passported benefits schemes are that the Government does not maintain its own public-facing benefits calculator showing all passported benefits on GOV.UK. Bizarrely, the Money and Pensions Service, which is a government-funded non-departmental public body sponsored by the DWP, does have a reasonably comprehensive benefits calculator including several passported benefits schemes on its MoneyHelper site, but this is not embedded or signposted on the relevant GOV.UK benefits calculators page.^[235]

External benefits calculators integrate some passported benefits and show whether claimants are better off working more, but none are exhaustive, showing income thresholds at which eligibility is withdrawn. It is the Government’s responsibility to make the consequences of its policy decisions clear so that claimants can make informed decisions about their lives. Claimants should not effectively have to carry out their own econometric modelling to understand what the best choice is.

3. Roll regular passported benefits into UC awards. 

Any passported benefit scheme that provides regular effective income-replacement to subsidise living costs should be consolidated into the relevant UC element. Known as the cashing-up approach, it provides far more flexibility for households to make their own decisions about where to spend or save rather than artificially skewing them towards decisions that may not be in their particular best interests. This delivers on the original intent behind UC: to make it a payment that covers all essential daily living costs. With the final end of migration from legacy benefits to UC within reach, now is the opportune moment to prepare a redesign within UC.

Radical consolidation would put levers determining all regular income replacement in the hands of the Secretary of State for Work and Pensions so that rates can be varied to reflect labour market and fiscal conditions in a single stroke rather than waiting years for individual policies to be reviewed while suffering the unintended consequences in DWP budgets. It also smoothes the path into employment by removing the arbitrary, lagging income thresholds at which support is suddenly withdrawn and avoids a large cliff-edge at the end of UC entitlement by tapering off proportionally.

Likewise, the government should review how the impact of adding to any elements affects those hitting the benefit cap. There are widespread exemptions to the cap which need separate attention and there will be changes this year in numbers reaching the cap after the  lifting the two child limit. The government should review these policies in the round alongside the sufficiency review to assess additional incentives there should be for those with high awards to seek work or move to less expensive areas.

a. Review the sufficiency of UC elements.

When UC rates were first set, there was no process to determine at what level they should be set and why. They largely carried over the nearest equivalent legacy benefit rate. Since then, there have been various calls to implement a form of Minimum Income Standard which sets out the minimum socially acceptable standard of living which benefit rates should reflect. However, due to the lack of proper accounting for what claimants actually pay for at the moment when passported benefits are included, these standards have set the wrong baseline for effective income.

With the new dataset proposed, the government can make a comprehensive assessment of the sufficiency of UC payments, passported benefits, earned income and discretionary support. This can provide the basis of where any scheme funding may need to be distributed if passported benefits are consolidated into core benefit payments. To make this credible, the Government first needs to understand what rates currently cover that would need to be paid out of pocket by claimants if passported schemes no longer existed.

Figure 12 – Consolidation of passported benefits into UC elements

Source: Onward analysis

b. Consolidate free school meals and the food component of the Holiday Activities and Food Programme into the UC child element, and abolish the extended right to free home-school-transport.

These two separate schemes create an uneven effective subsidy through the year, with periods where parents are able to access neither during parts of the school holidays. By consolidating into the child element as cash rather than an in-kind benefit, parents will have consistent income through the year to cover this cost.

Typical per day funding for HAF commissioned by local authorities is £5-7 across six weeks, so evening this out over the full 13 week school holiday is not dissimilar to the free school meals implied per-meal value of £2.61. As there is no up to date data on what proportion of eligible children are attending HAF and for how many days per school holiday, it is not possible to quantify the amount that would be needed to effectively cover full free school meals taken-up during the holidays. Funding for the activities element is dealt with below.

Given the Universal Infant Free School Meals policy, short of bringing this into means-testing too, the rate should simply be varied by age of child to apply a lower rate for infants equivalent to the HAF value only. Evaluation of the policy in England suggests that spending on food fell by about £230 a year, compared with a cost of £437 for a year’s worth of meals.^[236] This indicates that families were likely able to increase the quantity or quality of food at home, but it could also point to not all the free school food being consumed. With the same value in cash, parents could have instead chosen food their infant would eat, nutritionally balanced against other meals in the day. Non-passported benefits were beyond the scope of this review, but this and the new free school breakfasts policy should urgently be evaluated to compare against a means-tested, fully fungible system as outlined here.

With the expansion of free school meals to all children in families on UC next year, there is an opportunity to rethink the necessity of passporting free home-to-school transport to this cohort at all. The total cost of home-to-school transport is already bankrupting councils, while taking little account of widely variable real-world routes to and from school. There is an urgent need to address eligibility for SEND transport and costs, which may come in the wider review of SEND provision this year, but this is beyond the scope of this paper.

The UC child element is already designed to cover costs associated with raising children. With neither Scotland nor Wales implementing an equivalent policy, despite longer average journeys to school, there is no inherent justification to keep this policy in England. The general duty to provide the extended right should be removed in favour of discretionary assistance by exception for this cohort. The universal rules providing free school transport from three miles and above would remain.

Non-claimant families make difficult compromises about where to live to get their children to school, many of whom may be working much longer hours and therefore less able to take their children themselves. Claimant families should face the same set of basic choices, moving if they cannot reasonably afford their travel costs or want to choose a school that is not in the top three closest.

c. Consolidate the Sure Start Maternity Grant and Healthy Start into the UC child element for 0-4 year olds.

The Sure Start Maternity Grant and Healthy Start are both effectively fully fungible income top-ups with no evidence of health-based benefits. Parents are already using Healthy Start cards to more generally cover food and supplies for their children outside the rules of the scheme. It is possible to tie both these policies into the child element if desired, adding existing rates to age and number of children or more generally frontloading awards by age.

Additional awards pre-birth could even be included, for example, by a valid Maternity Exemption certificate confirming pregnancy triggering payment of the UC child element in the final one or two assessment periods before birth if there are no other children in the household. While Maternity Exemption certificates do not currently state whether a multiple birth is expected, this simple field could be added and confirmed at the 12-week scan. First, there is a need to properly evaluate whether either scheme is delivering better outcomes for parents and children alike to understand the right level of support at different early years stages.

d. Consolidate the activities component of the Holiday Activities and Food Programme and the childcare hours for extra support offer two year olds into the UC childcare element.

Given how low HAF take-up is, especially among secondary school age pupils, it is clear that the present offer is not appealing or readily available enough to eligible children. The activities element of the programme is effectively childcare by another name. UC claimants already have a reimbursement mechanism to claim back up to 85% of childcare costs from registered providers.

Only holiday childcare clubs for those under eight years old currently have to be Ofsted registered. The Department for Education should review the regulations determining what type of providers can become registered childcare providers to provide flexibility for more holiday clubs to be included up to the usual caps to avoid abuse from claims for excessively expensive activities. Claimants can pay for consumables like meals in the same way as other families, paying with the cash provided in their child element.

Likewise, take-up and attendance from those receiving the extra support offer at age two is low. To capture the disadvantaged two year olds offer within UC, the government should consider expanding eligibility for the UC childcare element to those in the conditionality regime of “Preparing for Work”. This could be limited to those in that regime who have a child aged two in their household to prevent those in the regime for other reasons using the offer. Parents on UC with children aged two are automatically placed in this conditionality regime and only required to undertake minimal work-related activities, such as writing a CV or undertake some training.

This change helps to tie receipt of subsidised childcare to at least some form of work-related activity. Parental worklessness in the long term is widely acknowledged as one of the most significant factors in long term life chances.^[237] Asking parents to meet a small proportion of the cost through the UC childcare element like other working families and take minor steps towards working is a reasonable expectation. In addition, there being at least some financial cost to parents may help to reduce non-attendance rates and make it less confusing having to separate out which hours are billed for which purpose.

e. Consolidate the Vulnerable Students Bursary into the Discretionary Bursary part of the 16-19 Bursary Fund.

While it may be better in terms of direct tie to education based-costs that the EMA predecessor scheme, the passported Vulnerable Students Bursary still does not fundamentally change the incentive to claim rather find part time work or work-based training while in non-advanced education, which has been proven to damage long-term outcomes.

Those between 16 and 17 who are unable to live with their parents are already given special dispensation to claim UC, paid at the under 25s rate of standard allowance. The standard allowance is designed to pay for essential living costs, with care leavers already paid the over 25s adult rate of UC and other normal elements available to those with children or health conditions. There is no substantive reason to expect that living expenses are considerably higher for those learning rather than working in that age bracket, with those working expected to pay for their own travel, work clothing, food and so on.

Education providers can still provide support on a case-by-case basis to those on low incomes through the Discretionary Bursary. Crucially providers are allowed to apply conditions to these bursaries, such as attendance, meaningful engagement and behaviour standards. This means that unlike for the Vulnerable Students Bursary, claimants cannot apply for funding based on the first few weeks’ expenses, receive the bursary and then disengage from learning. 

f. Abolish the Warm Home Discount, with any necessary income-replacement met by UC.

The radical potential of removing policy-imposed costs from energy bills is being seen this April with the annual average energy bill expected to drop considerably. Measures to remove any link to property or household composition from this year now make the Warm Home Discount rebate a blunt income-replacement measure, delivered at an arbitrary one-off point each year, usually well into winter.

If the Government deems that energy bills as part of daily living costs are not sufficiently accounted for in UC then it should change the rates accordingly (principally through the standard allowance or through the child element if it wanted to account for likely larger properties). If it wants energy suppliers to contribute to this cost, then it should make the conscious choice to levy them and be upfront about the consequences for bills.

Any necessary income replacement would provide a smoother effective bill reduction, meaning that there is less incentive to avoid turning on the heating when it might be necessary or else falling into debt in the run up to Christmas while waiting for the rebate to appear. If companies wish to offer lower energy rates to avoid customer arrears, these should be offered on the open market, encouraging competition which all can benefit from.

g. Abolish income-related WaterSure and mandatory water social tariffs, with specific medical needs met by PIP and any necessary income-replacement by UC.

WaterSure has been directly working against the two-child limit, unchecked for years. With the limit lifting this April, there is even less rationale for keeping this policy in place at the expense of other bill-payers. With water bills due to soar over the next few years due to Government-imposed changes, it is all the more imperative that as many extra costs as possible are removed in the interests of all consumers.

PIP is explicitly supposed to cover the extra day-to-day costs associated with long term health conditions. If severe enough to affect washing, bathing, managing the toilet or other functions, all of the medical conditions listed under WaterSure would qualify. If PIP descriptors are not adequately reflecting these costs, then that is a matter for PIP reform, rather than a duty that should be imposed on water companies.

If current or expected rises in water bills are deemed to have a sufficient impact on essential living costs for those on UC, then this should be reflected in UC awards, not elsewhere (in the standard allowance for adults in the household and the child element for children). And if the Government wants water companies to meet some of this cost despite the current state of the market then it should levy them accordingly rather than involve them in benefit delivery in such a piecemeal way. Suppliers could still target their own schemes at specific customers if they wished and would still need to provide Ofwat regulated debt support.

h. End shadow-regulation for broadband social tariffs, with any necessary income-replacement met by UC.

Passported broadband social tariffs may not be formally regulated in the same way as water or energy companies, but there has long been a veiled threat to suppliers that if they did not boost their social tariff offer, they would face intervention from Ofcom.^[238] However, it is clear that social tariffs are lulling claimants into the false perception that they do not need to switch tariffs to get the best deals like everyone else. It also encourages purchasing packages beyond what smaller households may need, for whom a 4g or 5g hotspot may be adequate.

In the same way as for the other utilities where regulation for social tariffs is proposed to be abolished, there should be an explicit shift away from this effective mandation, instead meeting any necessary additional income-replacement through UC.

i. Abolish local council tax reduction schemes and create an additional Council Tax element in UC.

Council tax is widely regarded as one of most regressive taxes in the UK, drawing on property values from 35 years ago.^[239] Wider options for reforming council tax itself are beyond the scope of this analysis, but it should be noted that a significant restructure of local government is currently underway, including merging councils into unitary authorities and imposing full council tax grant equalisation which will hit councils with historically low council tax the hardest.

As with the other household bills in this proposal, council tax reduction should likewise be consolidated into UC awards to avoid the present double-taper effect. The Institute for Fiscal Studies estimates that integrating council tax support into UC would mean that practically no workers faced marginal effective tax rates of over 75%. While this modelling does not account for other passported benefits, it still shows that consolidation would be a hugely significant step forward for work incentives.^[240]

As the archaic banding system for setting council tax is not reflected in any existing UC elements, a new element is proposed, which could be capped at Band B or C properties in each council area. A Band C cap would usually include modest two to three bedroom family homes, a Band B cap would typically cover one to two bedroom properties, but there is wide variation across the country. The latter would have a stronger effect on those in more expensive properties moving to other areas if they could not afford the total rent and council tax liability, but could also tip some councils in mass arrears. To lessen any initial income shock for those suddenly outside of support, a Band C may be preferable during current reorganisations, with a view to overhauling council tax in the round.  

j. Abolish Help to Save and add a sidecar savings deduction to the UC deductions mechanism.

Building up financial resilience through savings is vital to avoiding the need for crisis support, but Help to Save is creating perverse incentives. UC is meant to cover essential living costs, not enable a significantly more generous financial booster than any savings account in the private market. Incentivising claimants not to pay down their debts in the first instance to avoid interest accruing is potentially embedding damaging habits that will lessen their resilience in the long term.

Instead, the government should allow working UC claimants to have part of their claim deducted into a sidecar savings account. Similar to credit unions still run by some large employers, sidecar savings schemes (also known as rainy-day or “jars” schemes) are savings accounts where small deductions are taken each month from payroll or bank accounts to be set aside into a liquid and a long-term jar. Contributions first go into the liquid jar up to a cap, before rolling over into the long term jar. The liquid jar is easily accessible without penalty for unexpected expenses, whereas the long-term jar has more friction and penalties for withdrawing early, like loss of interest.

The Department for Work and Pensions has already sponsored work on this type of scheme, including through NEST Insight, which ran several trials exploring payroll-based deductions  and tested opt-out versus opt-in mechanisms.^[241] Employers including Timpson, BT, ITV, StepChange and the Co-op took part.

To make sure that those in unstable work or not in work also build up savings habits are included in a scheme, while not encouraging debt, sidecar savings should be added to the UC deductions priority order. The deduction priority order determines in what order deductions can be taken from a UC award to pay off debts, including UC advance payments, bill arrears, child maintenance payments and fines. The amount is capped at 15% of the standard allowance for those going to third parties and no more than three separate deductions are made at the same time.^[242]

A sidecar savings deduction should be added to the bottom of the deductions priority order, so that those with low or no debts have a small portion of their award automatically put into jars for a rainy day. By embedding this within the existing deductions regime, those who have existing debts will effectively not be eligible, so there is no artificial reward for delaying repayments. It far better simulates real-world savings habits while not leaving it up to chance as to whether a claimant’s employer runs a scheme. 

4. Consolidate or harmonise schemes for unforeseen or unavoidable costs.

Eligibility for help with isolated costs for those on low incomes should follow a basic set of rules controlled by the Secretary of State for Work & Pensions. It is not possible to roll these all together in the same way as for UC as they have complex additional eligibility criteria, but there are ways to rationalise how support is allocated, taking a household budget and cashflow approach rather than treating a single symptom of financial distress.

There should be a common framework for determining when a household’s disposable income or gross income is considered insufficient to meet an unexpected cost, rather than multiple different ways to test this. Assessments of income should always look at the total income including benefits, not just earned income. It should also include whether someone could reasonably have been expected to take their own steps to avoid incurring an expense they cannot meet in the first place or expect that they reduce their outgoings to meet the expense in the longer term through a loan or advance. 

Figure 13 – Consolidation of passported benefits and discretionary schemes into the Crisis and Resilience Fund

a. Consolidate the Flexible Support Fund and other local welfare schemes into the Crisis and Resilience Fund.

With the merger of Discretionary Housing Payments and the Household support fund, the Flexible Support Fund has been left an outlier. Funding for work-seeking purposes that someone would otherwise be unable to meet has a clear link to promoting long term financial resilience. Rolling this type of expense in will help put focus on work as a way of avoiding crisis for all those seeking to draw from the Crisis and Resilience Fund. It could still be used by Jobcentres too, through a partnership arrangement with councils.

More generally with the discretionary schemes, there will always be an efficiency case for retaining some ability to quickly give out petty cash in certain circumstances without needing to undertake a full assessment of means to pay, but this should not be unlimited. To give a sense of fairness to council taxpayers, an annual household cap could be set at the annual council tax rate for an average Band D property in the area. This should incentivise using funds to avoid recurring claims, focussing on helping those claiming become financially independent. Councils would still be allowed to assess income for lower payment amounts as appropriate depending on the claim.

Councils should also rationalise other local welfare-based offers into the Crisis and Resilience Fund for items like school uniform or bulky waste collection charges. For leisure and other activities, they should only automatically passport eligibility to services that are net-neutral or -negative in cost to council taxpayers. For example, if half price swimming pool access is offered to claimants and this still meets the unit cost of providing the service or it drives up use of the pool sufficiently to cover costs, this would be net-neutral. In some areas, this may require renegotiating concessions structures with Local Authority Trading Companies.

Private companies can use their own discretion to passport eligibility to claimants and these can be listed on the council’s website, but they should offset the cost to other customers themselves rather than be subsidised by council taxpayers.

b. Consolidate the Funeral Expenses Payment and Court Fee Remission into the Crisis and Resilience Fund.

Alongside their duties to provide Public Health funerals, Funeral Expense Payments should move back to local level, with accompanying regulation to mandate the current minimum standards of provision. The average cost of a Public Health funeral is almost identical to the average cost of the Funeral Expense Payment.^[243]

If fewer people default into needing a Public Health funeral due to being ineligible for the Funeral Expense Payment from the rigid relationship hierarchy, then a more dignified send off could be provided to some at no inherent additional cost. Routing this support through the Crisis and Resilience Fund could help to ensure that those experiencing a sudden change in circumstances due to the loss are better signposted to local support and discretionary funding if they need it.

c. Abolish the Warm Home Discount “Industry Initiatives” and the Energy Company Obligation, and consolidate the Warm Homes offer and the Cold Weather Payment into the Crisis and Resilience Fund.

The awkward “Industry Initiatives” part of the Warm Home Discount is largely needless duplication of other energy efficiency-focussed schemes, including the Energy Company Obligation. Rather than replace the Energy Company Obligation with another supplier-funded scheme, it should be consolidated into the Crisis and Resilience Fund.

Installing energy efficiency measures meets the aim of providing longer term financial resilience to claimants by permanently lowering their bills. The low-income scheme within the Warm Homes Plan should be folded into this fund too, creating a single scheme for applying for energy efficiency improvement funding. This means that when people present to the Crisis and Resilience Fund due to problems paying their energy bills, rather than just offer a temporary cash solution, they can immediately be offered a more sustainable solution. Likewise, Cold Weather Payments should also be added to this pot, incentivising those in areas with repeated triggers to take permanent steps to keep their homes warmer.

d. Use the same income test for Legal Aid and court fee remission as for other one-off costs.

It has been over five years since the legal aid means test review commenced, but some measures have still not been implemented. There are a number of reasons why it is necessary to keep Legal Aid separate from other one-off cost support schemes like the Crisis and Resilience Fund, not least because a significant number of cases brought by claimants are likely to be against the local authority itself, causing a conflict of interest. However, income testing could still use the same assessment of disposable and total income as for other one-off costs in the Crisis and Resilience Fund.

e. Consider abolishing prescription charges.

Prescription charge exemptions are near universal. Any policy for which 96% of the time it does not apply is not the policy at all – it is the exception. The income threshold leaves those on UC trying to work while managing health conditions but who fall outside medical exemption categories facing some months with and some months without charges.

Unlike other passporting benefits, there is no obvious UC gateway for including these costs in awards when the cost falls so unevenly on different claimants. Consolidating it into the UC health element would not be desirable when a claimant may face a limited period of high prescription incidence but this does not affect their capability for work.

Rather than seek to tinker further with the exemptions list, the Government should consider simply abolishing prescription charges altogether, as is the policy in Wales and Scotland. This comes with a high notional cost of around £500 million. However, evidence from organisations including the Royal Pharmaceutical Society, the Nuffield Trust and the Kings Fund all point to this cost being at least partially offset by lower downstream health costs. It could also be used to spur wider behavioural change in how the NHS is used if coupled with other systems shifts like greater use of prescribing pharmacists rather than taking up GP appointments. This will need attention beyond the scope of this paper, alongside the rest of the Help with Health Costs schemes.

5. Lower the UC taper to 50%.

The high proportion of people on UC with no work requirements is a sign of both how relatively more generous incapacity benefits and PIP are, but also how punitive UC is for those in work. When factoring in the passported benefits that people then lose as they earn more, it becomes very difficult to calculate from month to month whether claimants are better off working more. The conclusion for many is that it is simply not worth the risk trying to work if the path to progression is unclear at best, even if in reality there may be income tests to retain support for those not on benefits.

The lower the taper, the lower the marginal effective tax rate and the stronger the incentive to steadily increase hours or seek higher pay, slowly moving off benefits. The tax system, which treats people as individuals rather than households like the benefits system, will always be difficult to harmonise entirely with benefits in order to totally smooth incentives once the income tax and National Insurance threshold kicks in at £12,500. Lowering the taper rate is nevertheless the best lever to set the baseline from which any additional deductions are then made.

Lowering the taper is expensive, as it takes longer for benefit awards to reduce to £0. When the work allowance was raised to £500 and the taper was cut from 63% to 55% following the autumn Budget in 2021, it was estimated to cost just under £3 billion by 2026/27.^[244] Previous analysis by the Centre for Policy Studies in 2018 estimated a cost of £362 million per 1p reduction in the taper alone, giving a cost of £1.8 billion for a 5p cut.^[245] The caseload, case mix and rates of UC have changed considerably since then, but this is still a desirable policy to pursue. 

Given the scale of the other changes proposed, there is no current model that can simulate the impact of these changes taken together. As this report sets out, those coming off the taper have always faced a hidden cliff-edge from passported benefits withdrawal at the end of their claim or midway along the taper, making it far riskier to increase working hours or pay.

Claimants earning above the income tax and National Insurance personal allowance will still face marginal effective tax rates of more than 50%. Short of redesigning the tax system to treat people as households rather than individuals for tax purposes or hugely raising the personal allowance, there is no easy way to reconcile this. Cutting the taper at least lessens the impact of the deductions stacking. If the fiscal position allows after the sufficiency and policy costs review, then this is a cost worth bearing to fundamentally reset incentives.

Conclusion

Universal Credit was intended to reshape the relationship between the individual and the welfare system. It was built on the right principles, to streamline support into a smooth path in which work would always pay. Since then, the vision has been pulled off course by paternalism and perverse incentives. Schemes are continuing to expand and fragment further away from the main levers of control over welfare spending. A strategy to tackle poverty and end worklessness is impossible to deliver when policy implementation has become so diffuse.

Most people will be familiar with at least a couple flagship passported benefit schemes outlined in this paper. They are popular with the public and irresistible to politicians looking for positive news. Few will have been aware of their full extent. While on their own, schemes look well-meaning and harmless, together they push against the human instinct to work hard for a better life. When the cumulative result is that claimants cannot trust that working more will make them better off or are left unaware of support at all, this is not compassion, it is a trap.

Exposing a welfare system that effectively spends £10 billion more than headline figures suggest should be a wake-up call to those running it. With the end of legacy benefits in sight, the moment to start preparing for a hard reset must not be missed. The radical rationalisation set out in this paper offers a route back to the original promise: a single intelligible system in which people can see what they are entitled to, understand the gains from work, and plan their own lives without fear of hidden cliff edges.

The core recommendation is to regain control over income-replacement by consolidating multiple passported benefits into different parts of UC. It also outlines a more consistent approach to help those in crisis to build back their financial resilience. And the potential savings offer the opportunity to reduce the penalty that working claimants face that undermine progression towards financial independence from benefits. These changes should be matched by stronger work incentives with a lower UC taper to reduce the effective marginal deduction rates.

Ultimately, the public can only hold ministers and parliamentarians accountable for a system they can understand. That is why rationalisation must be accompanied by transparency: a single view of cumulative entitlements; routine publication of cross-government impacts; and a new way to measure income and outgoing. It will take courage and discipline to avoid the lure back to obfuscation. The prize is a welfare state that is cheaper to administer, simpler to explain – and most importantly – easier for claimants to leave behind.

Endnotes

^[1] Department for Work & Pensions, Universal Credit: Welfare that Works, November 2010link.

^[2] Department for Work & Pensions, Latest update: Move to UC, LA Welfare Direct 9/2023, December 2023link.

^[3] Department for Work & Pensions Careers, Putting data at the heart of the country’s challenges, Retrieved January 2026 link.

^[4] Department for Work & Pensions, Households below average income series: quality and methodology information report FYE 2023, March 2025 link; Department for Work & Pensions, Family Resources Survey: Background Information and Methodology, January 2026 link.

^[5] Social Metrics Commission, Measuring Poverty: A New Measure of Poverty for the UK, September 2018 link.

^[6] Department for Work & Pensions, Free School Meals: Expansion to All Children on Universal Credit – Impact on Individual and Child Poverty Levels and Number of Children in Households Receiving Universal Credit, June 2025 link.

^[7] Torres Cortés, F., Godoy Jalil, T., Hession, M. & Ghelan, D., Missing Out 2025: £24 Billion of Support is Unclaimed, Policy in Practice, September 2025 link.

^[8] Ibid, Table 1: Estimated value of unclaimed support, Great Britain 2025/26, page 6 link.

^[9] Ibid. link.

^[10]  Beatty, TKM., Blow, L., Crossley, TF. & O’Dea, C, Cash by any other name? Evidence on labeling from the UK Winter Fuel Payment, Journal of Public Economics. Volume 118, Pages 86-96, October 2014, link.; Britton, J., Ridpath, N., Villa, C. & Waltman, B. The short and long-run effects of the Education Maintenance Allowance, Institute for Fiscal Studies, February 2025 link. 

^[11] Hill, J., Everythingism: An Essay, The Pathology Holding Back the State, Reform, March 2025 link.

^[12] The Department for Work & Pensions, Universal Credit: The Impact on Passported Benefits: Report by the Social Security Advisory Committee and Response by the Secretary of State for Work and Pensions, March 2012 link.

^[13] The Department for Work & Pensions, Universal Credit Statistics, 29 April 2013 to 10 July 2025, December 2025, link.

^[14] Ibid. link.

^[15] Ray-Chaudari, S. & Waters, T., Universal Credit: Incomes, Incentives and the Remaining Roll-out, Institute for Fiscal Studies, June 2024, link.

^[16] Ibid. link. Sample includes all working individuals in families entitled to legacy benefits or Universal Credit, with an adult aged below SPA. IFS calculations using TAXBEN, the IFS tax and benefit microsimulation model, and Family Resources Survey 2022–23.

^[17] Ibid. link.

^[18] Ibid. link.

^[19] Broadband social tariffs are not formally regulated but providers have been under threat of regulation unless they provide and promote a social tariff, with all major providers now offering one.

^[20] Onward analysis, link. * denotes industry-funded schemes. ** denotes discretionary schemes. Claim count and average award should not be summed as no one household is likely to be eligible for all listed benefits.

^[21]  Department for Work & Pensions, Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper, October 2025 link. Eligibility for contributory or “new style” JSA and ESA is based on National Insurance contributions, designed to support those who have recently been employed. There are separate proposals to reform these into a new form of unemployment insurance.

^[22] Where UC-only eligibility figures are available, these are used. Otherwise, all those eligible via working-age income-related benefits are treated as if eligible via UC as these would likely retain eligibility via migration to UC in the next few years.

^[23] The Department for Work & Pensions, Universal Credit Work Capability Assessment statistics, April 2019 to September 2025, December 2025 link.

^[24] Ibid. link.

^[25] The Department for Work & Pensions, Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper, October 2025 link.

^[26] UK Parliament, Written questions, answers and statements: Sir Stephen Timms MP in response to a written question from Chris Law MP, September 2025link.

^[27] Department for Work & Pensions, Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper, Annex A: Summary of Policy Measures and Consultation Questions, October 2025 link.

^[28] For example, Hempsell, L. Motability won’t give up its lucrative business without a fight, The Spectator, June 2025, link.; Ryder, M. & Palmer, M., Reverse Gear: Why Motability is Broken and How to fix it, The Adam Smith Institute, 2025 link.

^[29] HM Treasury, Budget 2025, November 2025 link. 

^[30] UK Parliament, Response from Margaret Jackson MP in response to a written question on Free School Meals from Lynda Chalker MP, December 1976 link. 

^[31] Department for Education, Free School Meals: Guidance for Schools and Local Authorities, March 2018 (updated June 2025) link.

^[32] Department for Education, Expanding Free School Meals: What Parents Need to Know (Blog Post), June 2025 link. 

^[33] Cribb, J., Farquharson, C., McKendrick, A. & Waters, T. The Policy Menu for School Lunches: Options and Trade-offs in Expanding Free School Meals in England, Institute for Fiscal Studies, March 2023 link.

^[34] UK Parliament, Update on Children with No Recourse to Public Funds, A Statement to the House of Commons by Will Quince MP, March 2022 link.

^[35] Department for Education, Press Release: Over Half a Million More Children to Get Free School Meals, June 2025, link.

^[36] Cribb, J., Farquharson, C., McKendrick, A. & Waters, T. The Policy Menu for School Lunches: Options and Trade-offs in Expanding Free School Meals in England, Institute for Fiscal Studies, March 2023 link.

^[37] Department for Education, Press Release: Over Half a Million More Children to Get Free School Meals, June 2025, link.

^[38] Farquharson, C. & Waters T. Benefits – and Costs – of Expanding Access to Free School Meals Will Grow Over Time, Institute for Fiscal Studies, June 2025 link.

^[39] Cribb, J., Farquharson, C., McKendrick, A. & Waters, T. The Policy Menu for School Lunches: Options and Trade-offs in Expanding Free School Meals in England, Institute for Fiscal Studies, March 2023 link.

^[40] Onward analysis. Stats Wales, Pupils eligible for free school meals by local authority, region and year 2013/14-2024/25, Pupil Level Annual School Census (PLASC), Retrieved January 2026 link.

^[41] Greater London Authority, Request for Director Decision: Universal Free School Meals Programme 2025-26, May 2025 link.

^[42] Welsh Government, Universal Primary Free School Meals, July 2022 link. 

^[43] Welsh Government, Press Release: Welsh Primary School Meals Served with a £8 Million Boost, December 2025 link.

^[44] UK Parliament, Statement by Stephen Morgan MP to the House of Commons on Free School Meals, June 2025 link.

^[45] Whittaker, F. DfE Reviews Pupil Premium Amid Free Meals Extension Concerns, Schools Week, June 2025 link.

^[46] Department for Education, Pupil Premium: Allocations and Conditions of Grant 2025 to 2026 (Guidance), March 2025 (Updated December 2025) link.

^[47] The Sutton Trust, NFER’s Teacher Voice Omnibus Survey: School Funding and Pupil Premium 2024, April 2024 link.

^[48] Department for Education, Schools Block Funding Formulae 2025 to 2026: Analysis of Local Authorities’ Schools Block Funding Formulae (Guidance), June 2025 link.

^[49] Onward analysis. Department for Education, Press Release: Thousands of Pupils Receive Support to Boost School Attendance, October 2024 link.

^[50] UK Government, Financial help if you have children: Free school transport, Retrieved January 2026 link.

^[51] Local Government Association, The Future of Home to School Transport, June 2025 link.

^[52] National Audit Office, Home to School Transport: Department for Education, October 2025 link. 

^[53]  Local Government Association, The Future of Home to School Transport, June 2025 link.

^[54] Department for Education, Home to School Transport: LA Data Collection, October 2025 link.

^[55] Ministry of Housing, Communities and Local Government & Department for Education, Free School Travel: Funding Allocations (Guidance), February 2024 link.

^[56] UK Parliament, A response to a written question by Catherine McKinnel MP on the impact of Free School Meal eligibility changes on Free School Transport from Munira Wilson MP, June 2025 link.

^[57] Ministry of Housing, Communities and Local Government & Department for Education, Extended Rights Grant Allocations Financial Year 2024 to 2025: Explanatory Note on Methodology, February 2024 link.

^[58] UK Parliament, A response to a question by Georgia Gould MP on Government guidance to Local Authorities regarding Motability Scheme provision and Free Home to School Transport from David Simmonds MP, October 2025, link.

^[59] Ryder, M. & Palmer, M., Reverse Gear: Why Motability is Broken and How to fix it, The Adam Smith Institute, 2025 link.

^[60] Department for Education, Holiday Activities and Food Programme 2025 to 2026 (Guidance), December 2025 link.

^[61] Department for Education, Press Release: Parents to Save Thousands in Government Cost of Living Support, August 2025 link.

^[62] Coram Hempsall’s, Childcare Works HAF delivers DfE’s National Support Contract for the Holiday Activities and Food Programme, Retrieved January 2026 link.

^[63] Department for Education, Press Release: Parents to Save Thousands in Government Cost of Living Support, August 2025 link.

^[64] Department for Education, Evaluation of the 2021 Holiday Activities and Food Programme, March 2022 link.

^[65] Coram, Families Facing Holiday Childcare Bill of Over £1,000 per Child This Summer, With Significant Gaps in Provision for Children With Additional Needs (News Article), July 2025 link.

^[66] Smith, C., Cost of Summer Holiday Clubs Rises to £1,076 a Child, BBC News, July 2025 link.

^[67] Coram Hempsall’s, Childcare Works HAF delivers DfE’s National Support Contract for the Holiday Activities and Food Programme, Retrieved January 2026 link.

^[68] Department for Education, Press Release: Parents to Save Thousands in Government Cost of Living Support, August 2025 link.

^[69] Department for Education, Holiday Activities and Food and Local Authority Capacity Support: 2026 Financial Year Expected Allocations (Guidance), December 2025 link.

^[70] Department for Education, Eligibility: Holiday Activities and Food Programme 2026 to 2027 (Guidance), December 2025 link.

^[71] Department for Education, 16 to 19 Payment Data for Care to Learn and 16 to 19 Bursary Fund for Students in Defined Vulnerable Groups Schemes (Guidance), October 2025 link.

^[72] Department for Work & Pensions, Universal Credit and Students: Guidance on claiming Universal Credit if you’re a student, October 2025 link.

^[73] Britton, J., Ridpath, N., Villa, C. & Waltman, B. The short and long-run effects of the Education Maintenance Allowance, Institute for Fiscal Studies, February 2025 link.

^[74] Ibid. link. 

^[75] Ibid, link.

^[76] Department for Work & Pensions, Universal Credit and Education Course Levels (Guidance), September 2025, link.

^[77] Department for Education, Eligibility for 15 hours for 2 year olds receiving support, December 2025, link.

^[78] Department for Education, Children registered by disadvantaged status, retrieved January 2026, link.

^[79] Institute for Fiscal Studies, Annual report on education spending in England 2025/25, January 2026, link.

^[80] Nesta, 45 million lost house? Understanding usage of the two-year-old free childcare offer, January 2023, link.

^[81] Ibid. link.

^[82] Johnson, T., Ghelani, D., Walker, R. & Charlesworth, Z., Cheques and Imbalances: How Income Varies Throughout the Year for Universal Credit Households, Policy in Practice, March 2025, link.

^[83] Ibid, link.

^[84] National Audit Office, Investigation into Penalty Charge Notices in Healthcare, May 2019 link.

^[85] NHS Business Services Authority, NHS Help with Health Costs (HwHC) 2018/19 to 2024/25, June 2025 link.

^[86] NHS Business Services Authority, NHS Low Income Scheme: NHS Help with Health Costs (HwHC) 2018/19 to 2024/25, June 2025 link.

^[87]  National Audit Office, Investigation into Penalty Charge Notices in Healthcare, May 2019 link.

^[88]  NHS Business Services Authority, Additional Tables: NHS Help with Health Costs (HwHC) 2018/19 to 2024/25, June 2025 link.

^[89] NHS Business Services Authority,  Prescription Cost Analysis – England 2024/25, June 2025 link.

^[90] Ibid link.

^[91] NHS Business Services Authority, Additional Tables: NHS Help with Health Costs (HwHC) 2018/19 to 2024/25, June 2025 link.

^[92] Wickware, C., ‘Outdated, illogical and unfair’: The True Cost of Prescription Charges, The Pharmaceutical Journal, May 2023 link.

^[93] Ibid link.

^[94] NHS Business Services Authority, NHS Dental Statistics for England: National Activity Overview 2019/20 to 2024/25, August 2025 link.

^[95] NHS, HC11: Help with Healthcare Costs, December 2025 link.

^[96] NHS, Improving Non-Emergency Patient Transport Services: Report of the Non-Emergency Patient Transport Review, August 2021 link.

^[97] NHS Business Services Authority, General Ophthalmic Services (GOS) Activity Data for 2020-2023, August 2025 link.

^[98] UK Government, Benefits and Financial Support for Families: Sure Start Maternity Grant, Retrieved January 2026 link.

^[99] Department for Work & Pensions, Annual Report and Accounts 2024-2025, July 2025 link.

^[100] Department for Work & Pensions, Policy Paper–Universal Credit: Welfare that Works, November 2010 link.

^[101] Leyland, A., Ouédraogo, S., Nam, J., Bond, L., Briggs, A., Gray, R., Wood, R. & Dundas, R., Evaluation of Health in Pregnancy Grants in Scotland: A Natural Experiment Using Routine Data, 

Public Health Research Volume: 5, Issue: 6, October 2017 link.

^[102] Scottish Government, Best Start Grant and Best Start Foods: How it Works, February 2024 link.

^[103] Biggs, H., Wildman, J., Hamid, A., Holman, E., & MacGregor, A., Evaluation of the Five Family Payments: Annex A: Mixed Method Research, Scottish Government Social Research, September 2025 link.

^[104] NHS, Healthy Start: How to Apply, Retrieved January 2026 link.

^[105] Department for Health & Social Care, Eligibility for Healthy Start for Groups Who Have No Recourse to Public Funds or are Subject to Immigration Controls, July 2024 link.

^[106] NHS, Healthy Start Scheme Rules: What You’ll Get, Retrieved January 2026 link.

^[107] Scottish Government, Best Start Grant and Best Start Foods: How it Works, February 2024 link.

^[108] NHS, Healthy Start Scheme: A Guide for Retailers, April 2025 link.

^[109] Mumsnet and Reddit user discussions of misuse of Healthy Start cards. Mumsnet, Retrieved January 2026, link; Reddit, Retrieved January 2026, link, link.

^[110] NHS Healthy Start, Healthcare Professionals’ Guidance, Retrieved January 2026 link.

^[111] Ibid. link.

^[112] UK Parliament, A statement made to the House of Commons by Andrew Weston MP on Healthy Start Uptake Data, November 2024 link.

^[113] The Food Foundation, Government Set to Miss Target for Increased Uptake of Healthy Start (News Article), February 2023 link.

^[114] Dundas, R., Boroujerdi, M., Browne, S., Deidda, M., Bradshaw, P., Craig, P., McIntosh, E., Parkes, A., Wight, D., Wright, C. & Leyland AH., An Evaluation of the Healthy Start Voucher Scheme on Maternal Vitamin Use and Child Breastfeeding: A Natural Experiment Using Data Linkage,

Public Health Research Volume 11, Issue 11, November 2023 link.

^[115] Johnson, T., Ghelani, D., Walker, R. & Charlesworth, Z., Cheques and Imbalances: How Income Varies Throughout the Year for Universal Credit Households, Policy in Practice, March 2025 link.

^[116] UK Government, Explanatory Memorandum to the Healthy Start Scheme and Welfare Food (Amendment) Regulations 2016, October 2016 link.

^[117] Department for Energy Security & Net Zero, Warm Home Discount: Eligibility Statement (England and Wales), 2023 to 2024 Scheme Year Onward (Statutory Guidance), September 2023 link.

^[118] Ofgem, Warm Home Discount Annual Report: Scheme Year 13, March 2025 link.

^[119] Department for Energy Security & Net Zero, Warm Home Discount Statistics: England, Wales and Scotland 2024/25, June 2025, link.

^[120] Ibid, link.

^[121] Department for Energy Security & Net Zero, Expanding the Warm Home Discount Scheme 2025/26: Impact Assessment, April 2025 link.  

^[122] Ibid link.

^[123] Ofgem, Energy Company Obligation Public Reports and Data: Energy Company Obligation 3 Interim Measures, Retrieved January 2026 link.

^[124] Department for Business, Energy & Industrial Strategy, Final stage Impact Assessment ECO4, April 2022 link.

^[125] National Audit Office, Report – Value for money: Energy Efficiency Installations Under the Energy Company Obligation, October 2025 link.  

^[126] UK Parliament, A Response by Martin McCluskey MP to a Parliamentary Question on continuity between ECO4 and the Warm Homes Plan from Patricia Ferguson MP, December 2025 link.

^[127] Department for Energy Security and Net Zero, Warm Homes Plan, January 2026, link.

^[128] Onward analysis using: Department for Energy Security & Net Zero, Household Energy Efficiency Statistics, December 2025 link.

^[129] Child tax credits used as the highest legacy percentage. Cannot sum other legacy benefits as claimants could be in receipt of more than one. Department for Energy Security & Net Zero, Research and Analysis: Evaluation of the Energy Company Obligation (ECO) Phases 2t and 3, October 2023 link.

^[130] Onward analysis using: Department for Energy Security & Net Zero, Household Energy Efficiency Statistics, December 2025 link; Department for Energy Security & Net Zero, Research and Analysis: Evaluation of the Energy Company Obligation (ECO) Phases 2t and 3, October 2023 link.

^[131] Department for Energy Security & Net Zero, Warm Homes: Social Housing Fund Wave 3 – Successful Social Housing Landlords Including Local Authorities and Housing Associations, November 2025 link.

^[132] Department for Energy Security and Net Zero, Warm Homes Plan, January 2026, link.

^[133] Department for Work & Pensions, Cold Weather Payment Estimates in England and Wales: 1 November 2024 to 31 March 2025, April 2025 link.

^[134] Department for Work & Pensions, Corporate Report:  Social Fund Account 2023 to 2024, December 2024 link.

^[135] Department for Work & Pensions, Background and Methodology: Cold Weather Payment Estimates 2024 to 2025, April 2025 link.

^[136] Welsh Water, Bill Cap – WaterSure Wales Tariff, Retrieved January 2026 link.; Hafren Dyfrdwy, Bill Cap Scheme – WaterSure, Retrieved January 2026 link.

^[137] Consumer Council for Water, Water Mark 2025, November 2025 link.

^[138] Consumer Council for Water, Appendix 9d – Average Water Consumption (3 year rolling average (litres per person per day)), August 2025 link.; Consumer Council for Water, CCW 2020-21 Company Performance Data Appendices, November 2021link.

^[139] Department for Environment, Food & Rural Affairs, Consultation on Reforming the WaterSure Scheme, July 2025 link.

^[140] Consumer Council for Water, Draft Determinations Research: Summary Report 2024, November 2024 link.

^[141] Robinson, S. & O Regan N., Briefing Paper: The Shape of a Social Tariff, Social Market Foundation, January 2025 link.  

^[142] UK Government, The Water Industry (Charges) (Vulnerable Groups) Regulations 1999, December 1999 link.

^[143] Kidney Care UK, Home Dialysis Reimbursement: A Guide for Patients, Retrieved January 2026 link.

^[144] Department for Environment, Food & Rural Affairs, Proposed Reforms to the WaterSure Support Scheme, July 2025 link.

^[145] Consumer Council for Water, Recommendations – Improving the WaterSure Financial Support Scheme, January 2025 link.

^[146] Robinson, S. & O Regan N., Briefing Paper: The Shape of a Social Tariff, Social Market Foundation, January 2025 link.  

^[147] Consumer Council for Water,  Help with bills: Social Tariffs, Retrieved January 2026 link.

^[148] Consumer Council for Water, Water Mark 2025, November 2025 link.

^[149] Ofwat, Summary of Water Companies’ Published Plans for Affordability for 2025-30, December 2024 link.

^[150] Ofwat, Water Company Performance Report 2024-25, October 2025 link.; Robinson, S. & O Regan N., Briefing Paper: The Shape of a Social Tariff, Social Market Foundation, January 2025 link.

^[151] Ofwat, Summary of Water Companies’ Published Plans for Affordability for 2025-30, December 2024 link.

^[152] United Utilities, Low Income Water Discount Terms and Conditions, Retrieved January 2026 link.

^[153] Welsh Water, South West Water and United Utilities tie eligibility directly to UC receipt;

Consumer Council for Water, Water Mark 2025, November 2025 link.

^[154] Ibid. link.

^[155] Robinson, S. & O Regan N., Briefing Paper: The Shape of a Social Tariff, Social Market Foundation, January 2025 link.

^[156] Ibid link.

^[157] Consumer Council for Water, WaterVoice Social Tariffs, December 2020 link.

^[158] Ofwat, Ofwat Approves £104bn Upgrade to Accelerate Delivery of Cleaner Rivers and Seas and Secure Long-Term Drinking Water Supplies for Customers (News Article), December 2024 link.

^[159] Consumer Council for Water, 2 in 5 Households Say They Will Find it Difficult to Afford Water Bill Increases (News Article), November 2024 link.

^[160] Beckett, M., Broadband Social Tariff Deals: How to Get Low Income Broadband on Universal Credit, Uswitch, July 2025 link.

^[161] Ofcom, Social Tariffs: Cheaper Broadband and Phone Packages, October 2025 link.

^[162] Ofcom, Pricing Trends for Communications Services in the UK, December 2024 link.

^[163] Ibid link.

^[164] Ofcom, Half of Low-Income Households in the Dark Over Broadband Social Tariffs, April 2023 link.

^[165] Ofcom, Pricing Trends for Communications Services in the UK, December 2024 link.

^[166] Ibid link.

^[167] Torres Cortés, F., Godoy Jalil, T., Hession, M. & Ghelan, D., Missing Out 2025: £24 Billion of Support is Unclaimed, Policy in Practice, September 2025 link.

^[168] Ofcom, Half of Low-Income Households in the Dark Over Broadband Social Tariffs, April 2023 link.

^[169] Legal Aid Agency, Means Assessment Guidance, April 2025 link.

^[170] Ministry of Justice, Consultation Outcome: Legal Aid Means Test Review, May 2023 link.

^[171]Legal Aid Agency, Civil Legal Aid: Means Testing–Eligibility Limits, June 2025 link.

^[172] Public Accounts Committee, Written Evidence Submitted by Commons Law CIC, March 2024 link.

^[173] Bellamy, C. Independent Review of Criminal Legal Aid, Criminal Bar, November 2021 link.

^[174] Ministry of Justice, Consultation Outcome: Legal Aid Means Test Review, May 2023 link.

^[175] Ministry of Justice, Consultation Outcome: Legal Aid Means Test Review, May 2023 link.

^[176] UK Parliament, A Statement to the House of Commons by Mike Freer MP on the Government Response to Legal Aid Means Test Review, May 2023 link. 

^[177]  Ministry of Justice, Legal Aid Means Test Review – Civil, May 2023 link. 

^[178] Ministry of Justice, Legal Aid Data Dashboard, November 2025 link.

^[179] Legal Aid Agency, Corporate Report Annual Report and Accounts 2024-25: Performance Report, November 2025 link.

^[180] Ministry of Justice, Review of Civil Legal Aid Summary Report, January 2025 link.

^[181] Bellamy, C. Independent Review of Criminal Legal Aid, Criminal Bar, November 2021 link.

^[182] Ministry of Justice, Legal Aid Data Dashboard, November 2025 link.

^[183] Ministry of Justice, Get Help Paying Court and Tribunal Fees, Retrieved January 2026 link.

^[184] Ministry of Justice, Consultation Outcome: Revising the ‘Help with Fees’ Remission Scheme – Protecting and Enhancing Access to Justice, October 2023 link.

^[185] Ministry of Justice, Get Help Paying Court and Tribunal Fees, Retrieved January 2026 link.

^[186] Ministry of Justice, Court and Tribunal Fees: What They Are, Retrieved January 2026 link.

^[187] Ministry of Justice, Consultation Outcome: Revising the ‘Help with Fees’ Remission Scheme – Protecting and Enhancing Access to Justice, October 2023 link.

^[188] Ibid. link.

^[189] Ibid link.

^[190] Ibid. link.

^[191] European Social Charter (Council of Europe), Comments Submitted by the Quaker Social Action Concerning the Ad Hoc Report on the Cost-of-Living Crisis Submitted by The Government of the United Kingdom, June 2024 link.

^[192] UK Parliament, A Response from Torsten Bell MP to a written question from Ellie Chowns MP on the family tests in the eligibility criteria for Social Fund Funeral Expenses Payments, June 2025 link.

^[193] Sunlife, Cost of Dying 2025 Report: A Comprehensive View of Funeral Costs and Attitudes to Funerals Over Time,  June 2025 link.

^[194] Department for Work & Pensions, Corporate report Social Fund account 2024 to 2025, December 2025 link.

^[195] Sunlife, Cost of Dying 2025 Report: A Comprehensive View of Funeral Costs and Attitudes to Funerals Over Time,  June 2025 link.

^[196] UK Parliament, A Response from Guy Opperman MP to a question on how many claims were made for Funeral Expenses Payments, and how many were successful, from Steve McCabe MP, February 2022 link.

^[197] Scottish Government, Funeral Support Payment: If the Person Who Died was 18 or Over, April 2022, link.

^[198] Department for Work & Pensions, Press Release: Benefit Claimants to Get More Cash to Help With Funeral Costs, November 2019 link.

^[199] Scottish Government, Evaluation of Funeral Support Payment, Equality & Welfare Social Research, July 2022 link.

^[200] UK Government, Benefits and Financial Support When Someone Dies: Bereavement Support Payment, Retrieved January 2026 link.

^[201] Ibid link.

^[202] UK Government, Get Help with Savings if You’re on a Low Income (Help to Save), Retrieved January 2026 link.

^[203] HM Revenue & Customs,  HMRC Annual Report and Accounts: 2024 to 2025, July 2025 link.

^[204] HM Revenue & Customs, Annual Savings Statistics 2025: HMRC Statistics on Individual Savings Accounts, Child Trust Funds and Help to Save Accounts, September 2025 link.

^[205] HM Treasury and HM Revenue & Customs, Help to Save Reform Consultation Response and Delivery Consultation, October 2024, link.

^[206] HM Revenue & Customs, Annual Savings Statistics 2025: HMRC Statistics on Individual Savings Accounts, Child Trust Funds and Help to Save Accounts, September 2025 link.

^[207] HM Treasury and HM Revenue & Customs, Help to Save Reform Consultation Response and Delivery Consultation, October 2024, link.

^[208] HM Revenue & Customs, Evaluation of the Help to Save Scheme: HMRC Commissioned Ipsos to Undertake Qualitative and Quantitative Research with Users and Eligible non-users of the Help to Save Scheme, November 2025 link.

^[209] Ibid link.

^[210] Johnson, T., Ghelani, D., Walker, R. & Charlesworth, Z., Cheques and Imbalances: How Income Varies Throughout the Year for Universal Credit Households, Policy in Practice, March 2025 link.

^[211] Ibid link.

^[212] UK Government, Local Government Finance Act 2012: c. 17 (Council tax), Section 9, October 2012 link.

^[213] Ollenrenshaw, E. Three Years On: An Independent Review of Local Council Tax Support Schemes, March 2016 link.

^[214] Ministry for Housing, Communities and Local Government, The Government Response to an Independent Review of Local Council Tax Support Schemes, January 2018 link.

^[215]Adam, S., Joyce R. & Pope T., The Impacts of Localised Council Tax Support Schemes, The Institute for Fiscal Studies, January 2019 link.

^[216] Ibid. link.

^[217] Clegg, A., The Localisation Era: Assessing the Post-2013 Rise of Localised Social Security, The Resolution Foundation, November 2025 link.

^[218] Griffiths, R. & Wood, M., Cliff Edges and Precipitous Inclines: The Interaction Between Universal Credit and Additional Means-Tested Help for Working Claimants, The Institute for Policy Research, September 2024 link.

^[219] Johnson, T., Ghelani, D., Walker, R. & Charlesworth, Z., Cheques and Imbalances: How Income Varies Throughout the Year for Universal Credit Households, Policy in Practice, March 2025 link.

^[220] Ministry of Housing, Communities and Local Government, Statistical Data Set: Live Tables on Local Government Finance (Local Council Tax support), December 2025 link.

^[221] Take-up estimate includes England, Wales and Scotland: Torres Cortés, F., Godoy Jalil, T., Hession, M. & Ghelan, D., Missing Out 2025: £24 Billion of Support is Unclaimed, Policy in Practice, September 2025 link.

^[222] UK Parliament, Written questions, answers and statements: Guy Opperman MP in response to a written question from Jonathan Ashworth MP, October 2023, link.

^[223] Department for Work & Pensions, Crisis and Resilience Fund Guidance for local authorities in England (1 April 2026 to 31 March 2029), January 2026, link.

^[224] Department for Work & Pensions, Crisis and Resilience Fund: Guidance for local authorities in England (1 April 2026 to 31 March 2029): Annex E: CRF Allocations for Housing Payments, January 2026 link.

^[225] Department for Work & Pensions, Support for Mortgage Interest. Retrieved January 2026, link.

^[226]  Department for Work & Pensions, Use of Discretionary Housing Payments (DHPs) in England, link.

^[227] Onward analysis. 93% is the sum of the proportion used to weight the sample by age cohorts. Department for Work & Pensions, Research and Analysis: Early Evaluation of Discretionary Housing Payments, February 2024 link.

^[228] Department for Work & Pensions, Use of Discretionary Housing Payments: Analysis of End-of-Year Returns from Local Authorities, Data for April 2024 to March 2025, July 2025 link.

^[229] Department for Work & Pensions, Research and Analysis: Early Evaluation of Discretionary Housing Payments, February 2024 link.

^[230] Department for Work & Pensions, DWP Management Information on Progress of the Household Support Fund, Provided by Local Authorities, October 2024 link.

^[231] Department for Work & Pensions, Guidance 1 April 2025 to 31 March 2026: Household Support Fund guidance for county councils and unitary authorities in England, January 2026 link.

^[232] Department for Work & Pensions, Evaluation of the Household Support Fund 4, January 2025, link.

^[233] Onward analysis.

^[234] Department for Work & Pensions, Family Resources Survey: background information and methodology, January 2026 link.

^[235] Money Helper, Benefits Calculator, Accessed January 2026 link.; UK Government, Benefits calculators (entitledto benefits calculator, Turn2us benefits calculator, Policy in Practice better off calculator), Accessed January 2026 link.

^[236] Holford, A., & Rabe, B., Going Universal. The Impact of Free School Lunches on Child Body Weight Outcomes, Journal of Public Economics Plus, March 2022 link.

^[237] Department for Work & Pensions, Improving Lives: Helping Workless Families indicators and evidence base, March 2025, link.

^[238] UK Parliament, A Response from Matt Warman MP in answer to a question on Government plans to subsidise the cost of broadband in rural areas from Chi Onwurah MP, March 2021 link.

^[239] In England and Scotland. Wales revalued in 2003, implementing new bands from 2005.

^[240] Hoynes, H., Joyce, R. & Waters, T., Benefits and Tax Credits, The Institute for Fiscal Studies, July 2024 link.

^[241] NEST Insight, Sidecar savings tools could address two of the biggest financial challenges facing UK households, says Nest Insight, April 2023, link.

^[242] Department for Work and Pensions, Universal Credit change brings £420 boost to over a million households, April 2025, link.

^[243] Local Government Association, Public Health Funerals 2024: Research Report, July 2024 link.

^[244] HM Treasury, Autumn Budget and Spending Review 2021: Policy Costings, October 2021, link.

^[245] Clougherty, T., Make Work Pay: A New Agenda for Fairer Taxes, The Centre for Policy Studies, November 2018, link.

The post The Hidden Benefits Bill: How Universal Credit claimants get £10 billion in extra benefits appeared first on Onward.

———

“Our welfare system is broken, it is indefensible, economically and morally, and we must and we will reform it.” 

Not the words of a Conservative, but those of the Prime Minister back in March. Yet, weeks later, he was forced to abandon minor changes to the disability benefits system by Labour backbenchers. Now the Government’s attempts at meaningful reform and reducing spend have been abandoned altogether. It turns out that soundbites were never going to be enough to enable the serious analysis that is needed for our welfare system to be reformed in a way that provides support for those that need it, and helps those who don’t get into work. 

Our welfare system, originally designed to help those in need live normal fulfilling lives, has evolved, becoming something almost unrecognisable. There is a growing recognition that we have created a system that actively disincentivises millions of people from work. Conversations with employers, charities and those claiming benefits reveal a pattern that is becoming hard to ignore. For many, the welfare system no longer provides a route back to work. Instead, it encourages people to not even try. It is disastrous for those individuals whose life chances are affected – and catastrophic for the country’s finances.

There are examples everywhere. Businesses say they cannot fill apprenticeship places despite the fact that those who succeed could earn salaries of £50,000 within a few years. The roles remain unfilled despite unemployment rising over the past year. Why? Because, for many potential applicants, sickness benefits offer a higher income than the minimum wage, and once someone is signed off, it can be far easier, and in some cases better paying, to stay in the system than to step out of it. The result is wasted potential on both sides: employers desperate for workers and young people who never get the incentive to try. 

This experience reflects a broader structural issue in the welfare system: rather than simply providing a safety net, a swathe of benefits and support schemes have created conditions where staying on benefits is more attractive. The Personal Independence Payment traps people into inactivity. Examples of this are not hard to find, there are plenty of stories of people turning down courses and training that could have helped them build careers due to fear that it would be taken as evidence that he no longer needed extra support. 

Worse still, there is an entire commercial ecosystem for advisers who profit from advising vulnerable claimants: “sickfluencers”, paid for advice guides, application coaches – all helping applicants game the system to maximise the chances of claims being accepted. 

The same pattern exists for fit notes. GPs are being asked to make judgements about a person’s capacity for work that they often feel unqualified to make. Fit notes are sometimes issued after brief phone calls and often renewed without review. Some patients have even been asked how long they would like to be signed off. What should be a temporary measure has become, for many, a gateway to long-term absence from work.

These examples show how far the welfare system has strayed from its purpose. Work is not only a means of earning; it provides routine, confidence and connection. For people managing long-term health conditions, being in work can often improve wellbeing rather than harm it. Yet the system is structured in ways that reinforce dependency. The focus remains on incapacity rather than on the adaptations that could make employment possible. A welfare state that truly reflects compassion would support people in rebuilding their independence, not assume that their limitations define them.

There are practical steps that could begin to repair this. Initial benefit assessments should return to being face to face, allowing for a more accurate understanding of what claimants can do. Sick notes should involve proper medical review, with responsibility shared across health and employment services rather than resting solely with GPs. Benefits for minor or short-term conditions should be replaced with targeted support to help people back into work. Schemes offering discounted products and services should be limited only to those with serious medical conditions. Most importantly, disability benefits should only be available for those with serious conditions.

Reform will require a shift in attitude, one that sees work as part of recovery and welfare as a means to restore independence. The welfare system can still be a source of pride if it once again rewards effort, encourages aspiration and ensures that help is reserved for those who truly need it.

I have seen how an effective system can work. A friend of mine has autism and ADHD and struggles in conventional workplaces. The noise, the interruptions, and the unspoken social rules make it almost impossible for her to function in an office. Yet when she is given the chance to work from home, to set her own hours, and to concentrate during the quiet of the night, she thrives. She does not need a subsidised BMW through Motability, nor coaching on how to navigate a PIP form. What she needs is flexibility and minor adjustments in workplaces that allow her to contribute at her best. That is what genuine support should mean: removing practical barriers and creating conditions where people can succeed, rather than providing perks that do nothing to address the real challenges of disability.

Britain’s strength has always come from the willingness of its people to work hard and build a future. The task now is to design a welfare system that reflects that same spirit, one that enables the maximum number of people who can work to do so.

The post Britain isn’t working appeared first on Onward.

The funnel towards early unfettered access to benefits goes as follows: arrive illegally or on a temporary visa, maintain or establish family or community ties, move to a visa route with human rights protections, meet tenuous Home Office hardship criteria, and then claim benefits. The results can be seen in visa condition patterns. Nigerian migrants have almost double the number of applications for “Change of Conditions” to remove a “no recourse to public funds” visa condition than any other nationality since recording began.

While there may be factors that exacerbate financial difficulties for some migrants, to have such a consistent outlier raises systemic questions. Central to the issue is the European Convention on Human Rights, as applied to UK law by Labour’s Human Rights Act 1998 and interpreted by the courts. At every stage, Articles 3 and 8 provide protection from deportation, work requirements, visa fees and NHS charges, while allowing a gateway to eligibility for welfare.

Recent legal rulings have only served to widen the scope for abuse by eroding evidential thresholds and requiring Home Office caseworkers to take a proactive approach to destitution avoidance. The Labour Government has signalled their intention to crack down on abuse of some routes, but they will fail to meet their ambition by tinkering with the status quo. Only withdrawal from the ECHR or change in how it applies will fix this.

There will always be complex and compassionate cases in which a degree of discretion may be appropriate, but there are alternative ways of providing support that do not create perverse incentives. There is also an alarming lack of data to understand the true scale of the problem and the potential for gaming. A new visa casework system that is in progress will help close this gap, albeit too slowly without fully published information yet. Restoring public confidence in the integrity of the immigration system requires full transparency about its foibles – and action to close the loopholes.

Introduction

Most temporary visa applications require proof of financial means alongside a condition of “no recourse to public funds” (NRPF), barring access to most benefits. This is designed to ensure that those coming here for any length of time have the requisite funds to cover their costs without falling into destitution. However, it is possible to apply for this condition to be changed by providing evidence of destitution, unmet child welfare needs or in other exceptional financial circumstances.

If successful, this opens the door to the full suite of British state support, including Universal Credit, Personal Independence Payment, Child Benefit, Pension Credit, social housing eligibility and more. It creates an effective loophole for some visa routes whereby having sufficient financial means either does not apply at all or only applies at the point of visa issuance but can otherwise be relaxed.

While the Labour Government’s attention is focused on the small boats crisis, legal visa routes – backed by ECHR protections – are continuing to create perverse financial incentives for migrants and left wide open to abuse. Their Immigration White Paper signals an intention to tighten family migration policy by the end of the year, but with little detail on how it will close the multitude of loopholes while remaining signatories to the ECHR.

This paper reveals the ways to gain recourse to public funds while still only having Limited Leave to Remain. It considers how visa conditions can be changed and therefore which routes can effectively have no financial or work requirements. It then breaks down the nationalities of migrants that are gaining access to public funds via these routes and the welfare they are able to claim.

Visa routes with no recourse to public funds

The Home Office does not currently record the number or type of visas that are issued with an NRPF condition. However, it is possible to estimate those with temporary visas that would have NRPF applied by default. At the end of 2024, around 3.6 million people held visas that would usually have a NRPF condition.^[i] Prior to 2020, this figure stood consistently at under 1.5 million for the last decade.^[ii]

There are a range of financial requirements for these visas, from means just to support the stay for visitors, £29,000 for a five-year family route and up to £41,700 for certain skilled worker visas.^[iii] While most of these visa types are unlikely to get an NRPF condition changed under any circumstances, it is relevant to consider their volumes in the context of those who may then convert to another type of leave once here in order to gain access to public funds.

A much-delayed new system, Atlas, is being rolled out by the Home Office which will collect and publish information on NRPF in the future, but this is still a work in progress despite the latest published deadline for commencement being April 2025.^[iv] The total cohort of those with NRPF also includes those here illegally, whether due to never having had valid status or overstaying a valid visa, who will not be captured by the new system. 

The Home Office has discretion to grant access to public funds to those who would ordinarily have NRPF applied from the outset – but again, there is no data on how often this happens. The NRPF condition can also be lifted once a person is here to allow access to public funds when a person applies for a “Change of Conditions”. Change of Conditions are available for the following routes:

• Family Life 10-year route for partners and parents
• Private Life route for those with seven or more years of residence
• Child relative joining a sponsor with humanitarian protection or refugee status
• Hong Kong British National (Overseas)

The first three of these four routes exist due to Section 6 of the Human Rights Act 1998 which makes it unlawful for a public authority to act in a way which is incompatible with the ECHR, as interpreted by the courts. Article 8 of the ECHR sets out “the right to respect for his private and family life.” The special protection afforded to family life and private life routes means that, in addition to seeking asylum, they are often the only avenues to remaining in the UK left open to those who may have committed immigration offences, such as overstaying a visitor visa.

While Section 117B of the Nationality, Immigration and Asylum Act 2002, as amended by the Immigration Act 2014, states that “little weight” should be given to private life or relationships established when a person was in the UK illegally or with precarious status, these factors are not disbarring. This area is likely to be the focus of Labour’s new policy on “exceptional circumstances”, as set out in their white paper in May 2025, with details due by the end of the year.^[v] However, there is no indication that this part of their policy will include consideration of the migrant’s ability to support their family without relying on the taxpayer, with changes to these requirements only applying to other family migration routes.

Child relatives joining a sponsor with humanitarian protection or refugee status are further supported by the Refugee Convention administered by the United Nations, but Article 8 ECHR remains the backstop when refusal could be seen to disproportionately interfere with family life. As their adult sponsors have recourse to public funds, this cohort will not be considered in detail. British National (Overseas) visas available to migrants from Hong Kong account for only a very small number of Change of Conditions, as discussed further in the section on nationality.

The Home Office has discretion to remove NRPF from other leave types, including those on skilled worker or student visas, but this is riskier for the applicant. If an application for a Change of Conditions is refused, the Home Office will consider whether the applicant continues to meet the requirements of the route for which permission was originally granted. So, for these visa types, the financial thresholds that originally applied may be re-tested.

Change of Conditions and destitution

To get a Change of Conditions, applicants establish that they have compelling circumstances for requiring assistance from the state. These are set out in Section 95 of the Immigration and Asylum Act 1999, requiring one of the following:

• The applicant is destitute, meaning that either: they do not have adequate accommodation or any means of obtaining it; or, they have adequate accommodation but cannot meet other essential living needs.
• The applicant is at risk of imminent destitution, meaning they are unlikely to continue to meet their accommodation and living costs after three months.
• There are reasons relating to the welfare of a relevant child which outweigh the considerations for imposing or maintaining the condition.
• The applicant is facing exceptional circumstances affecting their income or expenditure.

Figure 1 shows that applications for Change of Conditions due to destitution have averaged almost 4,600 per year, with an average acceptance rate of 65%, but with a huge spike at the start of the Covid-19 pandemic in 2020.^[vi] It demonstrates that a temporary event – a global pandemic – provided a gateway to benefits that may have lasted beyond other temporary pandemic financial assistance.

Figure 1 – Destitution Change of Conditions applications and outcomes
Source: Home Office, Onward analysis^[vii]

Here again, the ECHR is central to the basis for providing relief, both under Article 8 as above, and also Article 3 which prohibits inhuman or degrading treatment, which covers the suffering that could be caused by destitution. Evidence to prove destitution can include a wide range of documentation but typically includes the last six months of bank statements, household bills and supporting documents from schools or GPs. The destitution test is based solely on the adequacy of their means in the UK, not whether they could sufficiently sustain themselves in their home country where the cost of living is likely to be much lower.

A recent legal case relying on Article 3 ECHR has further strengthened the ability to apply for a Change of Conditions or not have NRPF applied at all due to the risk of destitution rather than current destitution. SAG & Ors v Secretary of State for the Home Department in 2024 ruled against adopting a “wait and see” approach to processing a Change of Conditions.^[viii] This means that access to public funds can be granted based on a hypothetical future scenario rather than a realised crisis. It emphasises expediency over evidence, effectively meaning that waiting times for Change of Conditions are sufficiently long that if procuring formal records could cause harmful delays in support, self-certification and third-party corroboration can be proof enough.

The potential significance of this judgement should not be underestimated. It explicitly emphasised that it was not relevant whether applicants had previously managed to avoid destitution by drawing on third party support, even if the support was still available in a conditional or time-limited way. The intention to withdraw support validated the risk of destitution, rather than documentation of the applicant’s actual financial means. This reinforces Home Office caseworker guidance that there is only a general expectation for a migrant to support themself and their family while here, but lack of action to improve their financial circumstances cannot justify refusing access to public funds.^[ix]

The two non-destitution related grounds for a Change of Conditions can also be used to gain access to public funds for reasons that fall short of destitution. Again, recent litigation has altered the circumstances in which these tests can be met. With regard to welfare of the child, caseworkers now need to consider whether maintaining NRPF is in the best interests of the child versus if they had access to public funds.^[x] This fundamentally shifts the balance away from proven hardship in favour of awarding eligibility for the full suite of family benefits just because it would make them better off.

Facing “exceptional circumstances” affecting income or expenditure usually applies to families with disabilities, but does not have to relate to being destitute or even on a “very low income.”^[xi] The latest guidance states that caseworkers “must consider applying evidential flexibility” which can include not having to provide financial records at all.^[xii] Together, the creeping evolution of circumstances that allow NRPF to be disapplied has contributed to a system that may well assist those in genuinely desperate situations, but is open to abuse.

Visa renewal embedding recourse to public funds

It is possible to retain access to public funds when renewing a temporary visa, which for the family and private life routes is usually every two and half years. In 2024, the family life 10-year route accounted for over half of all extensions being granted for family reasons.^[xiii] There is no requirement or expectation that an applicant will have materially improved their circumstances during the time even if they have been in receipt of public funds. They simply need to tick a box and resubmit evidence that they would still be destitute were it not for the benefits they now receive to continue recourse to public funds from the start of their renewed visa.

This does not count as a new Change of Conditions but just removes NRPF as a visa condition from the outset of the renewed visa. In this way, Change of Conditions have a cumulative impact on visas that would usually have NRPF. No data is published on the breakdown of the leave types to which Change of Conditions are applied or when in a visas’ duration it has been granted.

Figure 2 shows the previous visa types that migrants held before entering the 10-year family life or private life routes in 2023, with the largest cohort extending into these routes from previous family visas.^[xiv] Up to June 2022 during the Covid-19 pandemic, visa holders could apply for exceptional assurance to receive an automatic extension if they could not complete a formal application due to being unable to attend appointments or access documents. These typically only lasted between one to three months at a time but could be used multiple times and effectively temporarily removed the need to meet salary thresholds.

Figure 2 – Visa extensions into 10-year family life or private life routes in 2023

Source: Home Office, Onward analysis^[xv]

Since 2021, the Home Office has only published previous categories of leave on family routes as a group, making it impossible to tell what proportion of those receiving an extension in the 10-year family life route in 2023 were renewing within this route rather than transferring from the five-year family route due to newly failing to meet the salary threshold. There are no statistics yet that show the impact of the increase in salary threshold for the five-year route from £18,600 to £29,000 in April 2024.^[xvi] The Migration Advisory Committee recently recommended that the Labour Government does not implement the further planned increase to £38,700 that was planned by the Conservatives, which would have harmonised this threshold with that for Skilled Workers.^[xvii]

There is also a significant “Other” category that includes over 4,100 transferring from visitor visas. After accounting for small numbers for small numbers transferring from Discretionary Leave or other legal routes, this leaves over three quarters of this category who do not have a previous valid leave type recorded, such as those who entered these routes from failed asylum seeking or overstaying. This means they may never have met any form of financial threshold to enter the UK in the first place or have had any intention to work. In addition, it indicates that the domestic provisions to apply “little weight” to time establishing a private or family life while here either illegally or with precarious status are not working as intended.

Visa and NHS fee waivers

Many of those who campaign against the NRPF condition point to the high fees that migrants are charged, including for visas themselves, the Immigration Health Surcharge and other costs to prepare their application, like legal advice, biometric tests and document copying. For example, applying for permission to remain four times on the family life 10-year route would cost £1,321 per person each time, as shown in Figure 3.^[xviii]

The Immigration Health Surcharge (IHS), designed to cover potential costs to the NHS and deter health tourism, has recently been drastically increased from £624 per year to £1,035 for adults from February 2024 onwards.^[xix] This means that adults on the 10-year family life route will have to pay £10,350 over the course of the route, with a discounted rate for children.

Figure 3 – Fees over the course of the 10-year family life route

Source: Home Office^[xx]

Though these fees are high, there are again waivers available in order to be compatible with the ECHR.^[xxi] These can apply to both the application for permission to remain and the IHS or just one. The bar for receiving a waiver is not even as stringent as the destitution criteria used for a Change of Conditions. It is a simpler test of affordability at the particular point at which they are required to pay the fee. According to the Impact Assessment published when IHS fees were increased in 2024, the central estimate of the proportion of fees that would be waived was over half, up from just over a third before the increase.^[xxii] Hence, many of those who will have NRPF on the family life or private life routes will be able to draw on public funds via the NHS for free.

To gain settled status at the end of the 10 years, there is a one-off charge of £3,029 per applicant, which can be waived too. Some may be able to curtail their time on the 10-year route before spending the full decade on that route if they have held another valid leave type prior to switching routes by qualifying for Indefinite Leave to Remain under long residence rules instead. 

Voluntary returns assistance

Support for migrants to return home is available to those who withdraw their application to stay in the UK, including those on the 10-year family or private life routes. The Voluntary Returns Service is able to buy the plane ticket, get a one-way travel document (if no valid passport is held) and pay for medical escort to fly with the returnee if needed.^[xxiii]

On top of this, those returning to a developing country can receive up to £3,000 to support their reintegration under a range of circumstances, such as departing as a family.^[xxiv] This is designed to be used to meet immediate needs on arrival, to find somewhere to live, support education, find a job or start a business. The financial checks to access this assistance are much less stringent than those for proving destitution and there is no requirement to account for items that could be sold immediately prior to departure.

Nationality of migrants

Given the lack of published data about those with NRPF, comparisons of the relative size of different nationalities gaining access to public funds are limited. However, it is possible to look at use of the family and private life routes versus those meeting financial requirements via the five-year family route. Indian, Nigerian and Pakistani nationals are the largest nationality groups granted family life 10-year route extensions of stay, and these three nationalities accounted for 45% of all extensions of this type in 2024.^[xxv]

Analysis by Migration Observatory compared the annual average of in-country grants of leave in the family life and private life routes versus the five-year partner route, by nationality.^[xxvi] As shown in Figure 4, updating this analysis with the latest available data, it shows that Nigerians and Ghanaians are overrepresented in the 10-year route compared to the five year partner route since 2010. This indicates that those seeking to remain here for family reasons from these two nationalities are disproportionately more likely to fail to meet the income threshold necessary for the five-year partner route than the other top nationalities on family routes.

Figure 4 – In-country grants of leave by selected visa routes and top five nationalities, 2010-2024

Source: Home Office, Onward analysis^[xxvii]

Likewise, breakdowns for those applying for and receiving a Change of Conditions due to destitution are also published by nationality. Since recording of Change of Conditions data started in mid-2017, Nigerians have submitted almost double the number of applications due to destitution than any other nationality, followed by Pakistanis, Ghanaians, Bangladeshis and Indians. Accepted application numbers for these countries are shown in Figure 5, with Nigerians remaining outliers.^[xxviii]

While all these nationalities experienced a large peak in accepted Change of Conditions in 2020, all five were consistently higher across the period. Jamaicans, Albanians, Sri Lankans, Iraqis and Afghans were the next highest nationalities for successful applications. British National (Overseas) from Hong Kong accounted for under 50 applications for Change of Conditions, of which just 17 have been accepted. It is difficult to ascertain the factors driving the high numbers of applications from certain countries compared to others and all the top countries for applications have similar rates of acceptance compared to the average.

Figure 5 – Destitution Change of Conditions by top 10 nationalities for accepted applications

Source: Home Office, Onward analysis^[xxix]

Explanations for application rates can be separated into two general categories: either these nationalities are more likely to face hardship, or better understand how Change of Conditions can be obtained. All these nationalities tend to be well-networked in the UK, with strong links to community-based organisations, which may help in sharing information about how to access support. Strong family obligations may mean that significant proportions of their income are sent back as remittances, increasing hardship in the UK (although this should be declared in evidence provided for a Change of Conditions application).

High numbers of migrants from all of these countries have taken up Health and Social Care Worker visas since it opened in 2020 and expanded in 2022.^[xxx] Work in this sector is among the least secure, with approximately 32% of care workers and 46% of registered nurses in domiciliary care operating on zero-hours contracts.^[xxxi] However, this route has not been open for long enough or with consistent conditions to show a connection – and it would not explain the high rates of Change of Conditions already there before the pandemic. However, the effect of these routes may yet be seen in future transfers to family life and private life routes.

Welfare with or without recourse to public funds

The perception that the system is being gamed to gain illegitimate access to benefits is fuelling negative views of immigration as a whole. An Ipsos poll carried out in May 2025 found that two thirds of Britons think that the number of people coming to the UK is too high.^[xxxii] Among those who held that view, the top reason given for what had contributed to this the most was the availability of welfare benefits.

While some of this is likely more directly connected to the salience of hotel accommodation for those claiming asylum (although immediate support is not delivered via mainstream welfare), the sentiment applies to wider net migration too. A separate Ipsos poll in April 2025 found that 57% thought that the number of people coming to the UK to live with family was too high, and 41% thought the number coming here to work was too high.^[xxxiii]

Recourse to national public funds

Having a visa condition of NRPF does not mean that there is no way to access any public funds at all. As mentioned above, it is possible for migrants to receive care from the NHS without paying the IHS. There are blanket entitlements to a range of employee benefits like statutory maternity pay and sick pay that fall outside of an NRPF condition. Since 2020, families with children in England who fall under the usual maximum income thresholds have been eligible for Free School Meals, regardless of NRPF conditions.^[xxxiv] These entitlements are all conferred separately from the NRPF framework, despite the significant cost to taxpayers.

The downstream impact of NRPF being disapplied are part of the newly published statistics on Universal Credit by immigration status.^[xxxv] Almost 75,000 people with Limited Leave to Remain, excluding those on the EU Settlement Scheme but including family reunion visas, were on Universal Credit in May 2025. Around two thirds of these claimants were not in employment. These figures will be skewed by those here on family reunion visas as they have recourse to public funds by default, but there is no breakdown yet that splits out these categories. According to an analysis of the Labour Force Survey by Migration Observatory, an estimated 10% working-age non-EU citizens who arrived in the five years to 2021 reported receiving at least one kind of benefit.^[xxxvi]

Tentative indicators of the effect may be seen in the number of those recently arriving in the UK gaining access to social housing. There were almost 66,000 households in social housing in England and Wales that had arrived in the UK less than five years prior to the 2021 Census.^[xxxvii] This will include those gaining access via refugee status, resettlement schemes and the five-year family route, but also those who may have had a Change of Conditions.

Local authorities often have long waiting lists and can impose local connection tests typically between two and five years. Recent legal cases have resulted in councils having to ensure that they do not apply rigid or excessively long rules that effectively bar recent migrants from access and discretion or exemptions must be built into these policies to avoid unlawful discrimination.^[xxxviii]

Applicants would have to demonstrate high levels of need to meet the criteria for housing within this timeframe – many of which are similar to the criteria for making destitution, child welfare or exceptional circumstance cases. However, once a social tenancy is secured, it can be a home for life – even if an NRPF condition is subsequently re-applied. 78% of new social lettings in 2023/24 were lifetime tenancies, with some councils explicitly abolishing new fixed term tenancies altogether.^[xxxix]

Local authority assistance

The Home Office actively encourages (but does not require) those with NRPF to seek out support via other avenues, in particular from local authorities, before applying for a Change of Conditions. There is no statutory duty on local authorities to collect data on migrants with NRPF approaching them for support. Local authorities have specific duties under the Children Act 1989 and the Care Act 2014 to provide assistance to children or those with care needs that apply irrespective of immigration conditions. Despite the former predating the Human Rights Act 1998 applying the ECHR to UK law, case law relating to Articles 3 and 8 have shaped how these duties are interpreted.

The NRPF Network publishes data it collects from the councils that subscribe to its NRPF Connect tool, which gives some insight into the scale of local welfare. In total, in 2023/24, £81.8 million was spent by the 85 councils subscribed to its platform, although not all provided complete financial data.^[xl] For example, families with children were supported for an average of two and a half years with an average of over £25,000 each per year. Many of the households supported were those with no status or those seeking asylum, or those with limited leave to remain that had recourse to public funds (via NRPF not being applied or through a Change of Conditions). As the data is incomplete and not geographically representative, it is not possible to assess the amount specifically received by those just on the family life or private life routes.

Recommendations

Conclusion

The hardship experienced by those facing destitution may cause real, lasting harm, but granting migrants unconditional access to the totality of the British benefits system before settled status cannot continue. Incentivising migrants to reach a seemingly imminent crisis point in order to unlock a lifetime on benefits, is neither a rational nor compassionate way to design policy. Rewarding remaining here at taxpayers’ expense is even more perverse when considering that the cost of living in their home country is likely much lower, in addition to the returns package they could receive when voluntarily departing.

Under the protection of the ECHR, allowing access to benefits for migrants who may have already broken the law by overstaying their visas violates the most basic principles of the social contract. All the while, generous voluntary return packages are available to help avoid a life of destitution back in their home country. And of course, for those genuinely unable to return, there is asylum, which is also in dire need of reform. Full transparency on the extent of abuse and withdrawal from the ECHR can begin the repair of both these broken systems.

^[i] House of Commons Library, No recourse to public funds, June 2025, link

^[ii] Migration Observatory, Deprivation and no recourse to public funds (NRPF) condition, November 2023, link

^[iii] Home Office, Indefinite leave to remain if you have family in the UK, link; Home Office, Skilled worker visa, link

^[iv] Home Office, Immigration system statistics year end March 2025: About this release, link

^[v] Home Office, Restoring Control over the Immigration System, May 2025  link

^[vi] Home Office, UK Visas and Immigration Protection: Immigration and protection data: Q1 2025, link  

^[vii] Home Office, UK Visas and Immigration Protection: destitution change of conditions, link

^[viii] R (SAG & Ors) v Secretary of State for the Home Department [2024] EWHC 2984 (Admin), link

^[ix] Home Office, Permitting access to public funds, April 2025, link

^[x] R (AB & Ors) v Secretary of State for the Home Department [2022] EWHC 1524 (Admin), link

^[xi] R (Fakih) v Secretary of State for the Home Department (High Court, Judge O’Connor, 2015), link

^[xii] Home Office, Permitting access to public funds, April 2025, link

^[xiii] Home Office, Why do people come to the UK – Family, link

^[xiv] Home Office, Immigration system statistics: Extensions detailed datasets, year ending March 2025, link

^[xv] Home Office, Immigration system statistics, Extensions detailed datasets, year ending March 2025, link

^[xvi] Home Office, Net migration package delivered as family visa tightened, April 2024, link

^[xvii] Migration Advisory Committee, Family visa financial requirements review, June 2025 link

^[xviii] Home Office Immigration and nationality fees, 1 July 2025, link

^[xix] Home Office, Pay for UK healthcare as part of your immigration application, link

^[xx] Home Office, Immigration and nationality fees, 1 July 2025, link; Home Office, Pay for UK healthcare as part of your immigration application, link

^[xxi] Home Office, Fee waiver: Human rights-based and other specified applications, link

^[xxii] Home Office, Impact assessment, Increasing the Immigration Health Surcharge, 2023, link

^[xxiii] Home Office, Voluntary returns service, Practical information for applicants, link

^[xxiv] Home Office, Voluntary and assisted departures, link

^[xxv]  Home Office, Immigration system statistics, Extensions detailed datasets, year ending March 2025, link

^[xxvi] Migration Observatory, Migrants on ten-year routes to settlement in the UK, July 2021, link

^[xxvii] Home Office, Immigration system statistics, Extensions detailed datasets, year ending March 2025, link

^[xxviii] Home Office, Immigration and protection data, Destitution change of conditions nationality of applicant, link

^[xxix] Home Office, Immigration and protection data, Destitution change of conditions nationality of applicant, link

^[xxx] Home Office, Immigration system statistics, Why do people come to the UK – Work?, year ending March 2025, link

^[xxxi] Skills for Care, The State of the Adult Social Care Sector and Workforce 2023, link

^[xxxii] Ipsos, Attitudes towards migration, May 2025, link

^[xxxiii] Ipsos, Immigration polling, April 2025, link

^[xxxiv] Department for Education, Providing free school meals to families with no recourse to public funds (NRPF), June 2025, link

^[xxxv] Department for Work and Pensions, Universal Credit, Immigration status and nationality statistics, July 2025, link

^[xxxvi] Migration Observatory, Deprivation and the no recourse to public funds (NRPF) condition, November 2023, link

^[xxxvii] Office for National Statistics, Census 2021, Tenure of household and year of arrival in the UK, link; Households are denoted by “household reference person”

^[xxxviii] R (Ward & Ors) v London Borough of Hillingdon [2019] EWCA Civ 692; R (Gullu) v London Borough of Hillingdon [2019] EWCA Civ 692, link

^[xxxix] Ministry of Housing, Communities and Local Government, Social housing lettings in England, tenancies: April 2023 to March 2024, link

^[xl] NRPF Network, NRPF Connect Data Report 2023/24, link

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