Cap on benefits hits London hardest

© Paop | - Protest Against Cuts In Public Spending Photo

Photo: © Paop |

The cap on household benefits, introduced 2 years ago, has had its biggest impact in London. And the plan announced in last week’s budget to reduce it by a further £3,000 will hit many more families in the capital.

The cap limits the benefits a household can receive to £26,000 per year, to keep it in line with the median wage in the UK. But the welfare changes announced in the budget included plans to reduce the amount to £23,000 in London and £20,000 elsewhere.

The latest figures from the Department of Work and Pensions for February 2015 show that 49% of capped households are in London. This is largely due to the high cost of housing which means that more households in London receive housing benefit, one of the benefits included in the cap.

Benefit cap households

While the 10,520 represents only 1.3% of housing benefit claims the proportion in London is 3 times higher than anywhere else in the country.

The £26,000 cap means a £500 weekly benefit limit for a couple or single parent, and £350 for a single person. London also has the highest number of single person and lone parents houseolds that have been capped.

See also

1 in 3 kids growing up in out-of-work households in parts of London

Elderly show wealth divide – 75,000 not claiming pension, more rely on benefits

90% of the families with one or two children who had benefits capped are in London. This is again due to housing cost. Elsewhere in the country families of this size and larger can find a place to live below the level of the cap. The largest number of benefit caps in London was on families with 3 children.

Of the 20 local authorities in Great Britain with the largest number of households affected by the cap, 19 were in London. Across the city Brent, Ealing, Enfield, Westminster and Tower Hamlets had largest numbers of benefit claimants with capped payments

benefit cap map

Brent and Westminster stand out as having the most households affected by large amounts. Each has had more than 250 households whose housing benefits have been reduced by £200 per week or more.

Since the cap was introduced in April 2013, 26,500 households in London have been affected. The number reached a peak of 13,500 in December 2013 and has come down to 10,500 in February this year.

Reasons why households are no longer subject to the benefits cap include moving home, becoming pensioners or moving into work. London has a higher proportion than the rest of the country of capped household moving to Working Tax Credits, indicating a shift into low paid work.

Source data