No-deal Brexit impact to welfare

No one knows what the future will be. But there have been independent studies done that say if there is a no-deal Brexit, that all of the welfare benefits, housing schemes, and government financial aid to the poor and needy will need to be cut back.

Different not-for-profits have released reports over the months trying to gauge the impact of Brexit as well as one without a deal. The reports vary. One of them, from the National Institute of Economic and Social Research, says the poor will be hit hard. Welfare benefits will need to be reduced, and while the amounts will vary, it can be up to £5,600 per year for some claimants. Other reports indicate similar cutbacks to everything from disability to housing to local council welfare and grant schemes (which help pay for food and energy bills).

Why will benefits be reduced if no Brexit? The reports say that the government will no longer be able to afford to be as generous in these schemes. The reason why is that the economy will slow and budget deficits would increase. It is estimated that the deficit of the central government could increase and be up to 6.14% larger in just 2 years. That will drastically hit slow the economy and cause the government to spend more money to service that debt. If there is less money due to a slow economy, then everyone will be impacted, including all of the local welfare schemes and other assistance programmes for the poor.

Now what would the government due if no-deal Brexit? They could either raise taxes or cut spending, or some combination of the two. If spending is reduced, then welfare will be impacted as well. If the generous benefit system in the UK takes the brunt of the cutbacks, then the low income, vulnerable, poor and others will face major cut backs. Everything from food to housing, energy and fuel as well as other welfare payments will be reduced. The average family may see up to £5,600 in reductions.

There have been other reports done by different government agencies and not-for-profits. Some say the economy will grow if no-deal Brexit. Others say the impact to GDP will be minimal. The fact is that no-one knows for sure. The UK is in unchartered territory. There is more risk of something going wrong if no-deal Brexit, and no matter what camp you are in, if you do receive any government benefits it is best to plan for the worst (cutbacks) and hope for the best.

This means that now is the time to save money and prepare. Talk to citizens advice for money management advice. Set aside money to pay for food and medicines. Go to a credit union to explore savings, potential loans (if needed) and more. Pay down any debts on credit cards or other bills. Talk to family members about sharing housing if need be or any threat of homelessness. Be prepared. As the future is even more uncertain than before.