Who are the new COVID-19 cohort of benefit claimants?

Rapid Findings #2 (September 2020)

Our full report ‘Who are the new COVID-19 cohort of benefit claimants?‘ released here.

Since March 2020, we have witnessed the fastest increase in the number of people claiming working-age social security benefits in the UK since records began. The incorporation of a new group of benefit claimants into the social security system has presented its own procedural and administrative challenges for the Department for Work and Pensions (DWP). Some commentators have lauded the government’s response to the crisis amidst a surge in new claims. Beyond the sheer volume of claimants, recent developments present a fresh set of priorities for those working in benefit, income and employment support. These priorities stem from the considerable challenges facing the UK labour market with sizeable portions of the economy having to adapt to a ‘new normal’ of altered hours and working practices alongside shifting demand and capacity. Additionally, these priorities stem from a large new group of claimants who face their own unique challenges in accessing adequate social assistance and appropriate employment support during the course of the pandemic.

At present, we currently know relatively little about who the new cohort of COVID-19 benefit claimants are. What differences currently distinguish new claimants from existing ones? What are the factors behind new claimants seeking social assistance? What will their financial and employment trajectories look like?

Answers to these questions can give a sense of the practical steps needed to best support claimants. This includes identifying the resources and training necessary to ensure central and local government are responsive in delivering appropriate services that engage with the needs of claimants and the extraordinary circumstances many currently face.

This rapid report provides an overview of some of the key characteristics of benefit claimants and distinguishes between those who made their claim either before or after the COVID-19 outbreak in the UK. Here, we draw on survey data collected online from 7,601 new and existing claimants by YouGov between 21st May and 15th June 2020. The findings suggest that the socio-demographic profile of new claimants differs considerably from those who were already claiming before COVID-19. The new cohort of COVID-19 benefit claimants are more likely to be:

• younger: almost half (46%) of new benefit claimants are aged between 18-39 years old, compared to 37% of existing claimants.

• BAME: 8% of new claimants are from BAME backgrounds compared to 6% of existing claimants. New BAME claimants have been disproportionately impacted by job loss and/or a reduction in their hours.

• men: 49% of new benefit claimants are male compared to 43% of existing benefit claimants.

• not experiencing a disability: only 38% of new benefit claimants experience some kind of health condition or disability compared to 67% of existing claimants.

• from a higher ‘social grade’: more than a quarter (26%) of new claimants are from social grade AB compared to 15% of existing claimants.

• university graduates: almost a third (32%) of new claimants had a University Diploma or above, compared to 26% of existing claimants. In part this is driven by the younger age profile of new claimants who are more likely to be university graduates. However, this is also evident when focusing exclusively on those aged 18-39. Amongst this age group, 41% of new claimants hold a university diploma or above, compared to 28% of existing claimants.

• owner occupiers: 29% of new benefit claimants were owner occupiers compared to 25% of existing claimants. In addition, only 13% of new claimants were social renters compared to a 33% of existing claimants.

Where possible, we explore whether these differences can be explained by ‘churn’ within the benefits system: when the characteristics of newer, short-term, claimants tend to differ from those of claimants who remain in the benefits system for a longer period of time. Here, we find that the profile of new claimants is atypical to that of pre-pandemic claimants. However, it should be noted that particular differences between existing and new claimants may be explained by others. These differences are observed in our weighted dataset which provides a nationally representative picture of working-age (18-64) claimants. Further details about this survey and the full set of surveys planned over the 18 months of the project can be found at the end of this report.

It remains to be seen whether the distinctive characteristics of existing and new claimant groups will endure over time. In the medium term though, the demographic profile of new claimants highlights a unique set of challenges facing the DWP and those who have made a claim since March 2020. The uneven impacts of the pandemic are partly reflected in the new COVID-19 cohort of benefit claimants. These differences raise questions about the inequalities that exist as people enter into the benefit system, but also the administrative and operational features that risk amplifying these inequalities or creating new ones. It is beyond the remit of this report, but demographic differences between new and existing claimants raise a series of important questions about the policies and support needs of those navigating the benefits system in the months and years to come. In the conclusion, we briefly reflect on these, but a more detailed consideration will be a key focus of our project over the next 18 months.