Impacts of the Universal Credit welfare reform on wellbeing : A natural experiment study using UK population survey data

Introduction: Universal Credit (UC) was a large-scale reform of the UK welfare system, replacing six existing benefits. UC aimed to simplify claims and encourage more claimants into work. Previous research has found evidence of harms to the mental health of recipients, potentially exacerbating existing health inequalities. We identify the effect of UC on self-reported measures of psychological well-being, treating the phased rollout from 2013-2018 as a natural experiment.<br/><br/>Methods: We estimated differences in psychological well-being outcomes associated with the staggered introduction of UC across Local Authorities, using areas where Universal Credit was not yet available as controls. We included working-age (18-64) respondents of the Annual Population Survey in Great Britain from 2012-2019 (n=245,658), living in low-income households. We used the four self-reported measures of psychological well-being recorded in the survey: Life Satisfaction, Happiness, Life Worthwhile and Anxiety. We tested for differential effects by disability, age, caring responsibilities, sex, country, ethnicity, education and household structure.<br/><br/>Results: UC was associated with per-claimant decreases in Life Satisfaction (-0.66; 95%CI -1.01 to -0.30), Happiness (-0.41; 95%CI -0.77 to -0.05) and Life Worthwhile (-0.73; 95%CI -1.03 to -0.42), and increases in Anxiety (+0.79; 95%CI 0.30 to 1.27). These changes were two to six times as large as the effects on wellbeing of the COVID-19 pandemic. Respondents in Wales and Scotland saw comparatively greater effects compared to those in England across several outcomes. UC exposure saw greater comparative increases in anxiety amongst disabled people (+0.19; 95%CI 0.12 to 0.27), single people (+0.13; 95%CI 0.06 to 0.21) and people aged under 25 (+0.27; 95%CI 0.15 to 0.39).<br/><br/>Conclusions: The introduction of UC had adverse effects across all four measures of well-being. Vulnerable groups typically experienced greater harms, reinforcing calls for reforms to Universal Credit to reduce the health and wellbeing impacts of poverty and unemployment.<br/>