Public believes unemployment benefit should be half of minimum wage – double what it currently is

The public believe the basic rate of universal credit (UC) for people who are unemployed should be just over half a full-time minimum wage salary (officially called the ​“national living wage”), according to new polling released today by the New Economics Foundation (NEF). This is more than double the actual current basic rate of UC.

On average, respondents thought that the actual amount unemployed people currently receive to cover day-to-day costs (not including housing) is 48% of a full-time minimum wage salary, and that it should be 53%.

However, the current basic rate of UC (the main benefit for people who are unemployed) is £91 a week for a single person over 25, just 23% of the £400 someone would be paid for working 35 hours on the minimum wage.

This means that, on average, people think that the basic rate of UC for those out of work is more than double what it really is compared to a full-time minimum wage salary, but believe that it should be a further 5 percentage points higher than that level.

When the minimum wage was introduced 25 years ago in 1999, unemployment benefits were worth 40% of a full-time minimum wage salary, but this has atrophied since to just 23% now. The minimum wage has seen welcome substantial real-terms increases during this period, whereas benefits have, at most, only risen in line with inflation.

Tom Pollard, head of social policy at NEF, said:

“The cost of living is the biggest concern for voters at this election campaign, but too often these debates fail to represent the reality of the lives of people getting by on the lowest incomes.

“When benefits are discussed, the public often come away with the impression that people receive much more financial support than they really do. This is partly because benefit rates are not pegged to a meaningful assessment of how much is needed to make ends meet, as the New Economics Foundation has been calling for.

“This polling shows that, when given a tangible and relatable benchmark of a minimum wage salary to compare to, most people hugely overestimate the current value of unemployment benefits but are still in favour of them being increased.”

The polling found that, regardless of voting intention at the general election, respondents all supported a much higher rate of unemployment benefit compared to the reality.

Labour supporters on average felt the basic rate of UC should be 57% of a full-time minimum wage salary, while Liberal Democrat supporters said 56% and Conservative supporters 46%.

Pollard said:

“Very few people would think that getting by on a minimum wage salary is easy or comfortable, and so it’s understandable that the public wouldn’t expect people to have to live on less than half of this income.

“But benefits are at historically low rates, particularly in relation to average wages, and many people have to try to meet their day-to-day costs on less than a quarter of what people in the lowest-paid full-time jobs receive.

“As a starting point, the next government must introduce an Essentials Guarantee so that people have the security of a level of income that allows them to meet their essential costs.”

ENDS

Contact

James Rush – james.rush@neweconomics.org

Notes

The New Economics Foundation is a charitable think tank who are wholly independent of political parties and committed to being transparent about how it is funded. 

The analysis is available to read in full here.

The polling was conducted by Opinium Research, who carried out an online survey of 2,041 UK adults aged 18+ from 1st to 3rd May 2024. Results have been weighted to be politically and nationally representative. Results are weighted by: gender age and education interlocked, region, working status, ethnicity, 2019 past vote, 2016 EU referendum vote, and political attention level.

The two questions referenced in this press release are included below. Respondents were able to either provide a free-text numerical answer or select ​‘don’t know’. The weighted sample for Q9 and Q10, once ​‘don’t knows’ were excluded, were 1,331 and 1,021 respectively.

We would like to ask about what level unemployment benefit should be set at. By unemployment benefit, we mean support people get for day-to-day costs (food, bills, travel etc), not including support they may get with their housing costs.

Q9 What percentage of a full-time salary at the National Living Wage (previously known as the minimum wage) do you think people should get from unemployment benefit?

Q10 What percentage of a full-time salary at the National Living Wage (previously known as the minimum wage) do you think people currently get from unemployment benefit?

Current and historical comparisons of unemployment benefits and the minimum wage are based on NEF analysis of data from the Low Pay Commission and the Department for Work and Pensions.