UK Pilot: £2,000 Cash Grants Reduce Homelessness Among Care Leavers
A groundbreaking UK pilot study has revealed that providing unconditional cash payments to young people exiting the care system can dramatically improve their housing outcomes and overall quality of life. The research, conducted by the Policy Institute at King's College London, demonstrates that a one-off £2,000 lump sum significantly reduces sofa-surfing and enhances stability for care leavers.
Key Findings from the Landmark Study
The study, commissioned by the Centre for Homelessness Impact, involved 99 young people leaving local authority care across nine areas in England who received the payment in June 2023. Their progress was monitored over six and twelve months and compared against a control group of 200 similar care leavers who did not receive the funds.
Researchers discovered that participants who received the money were eight percentage points more likely to be in stable housing after six months. Additionally, there was a notable reduction of over six percentage points in sofa-surfing among this group. These findings are particularly significant given that individuals with care experience are disproportionately affected by homelessness—approximately one in ten rough sleepers in London have been in care, and more than a quarter of young care leavers report having sofa-surfed.
Broader Impacts on Wellbeing and Behaviour
Beyond housing, the cash transfers yielded multiple positive effects. Recipients reported spending 12% less on alcohol, tobacco, and drugs compared to their previous habits. They also exhibited better overall wellbeing, increased optimism for the future, and greater confidence in handling problems a year after receiving the payment.
Notably, those who got the money were less likely to experience evictions linked to antisocial behaviour. They were also more inclined to seek medical care, such as visiting GPs or drop-in clinics, and had fewer overnight hospital stays—with 17 fewer stays recorded in the group that received the cash sum, although this effect diminished over time.
Personal Stories and Practical Benefits
One participant, Aeryn, shared how the payment enabled her to purchase a laptop, which helped her complete further education. She expressed astonishment at the opportunity, stating, "I was speechless for a good 10 minutes. They said: 'Here's your money, you can do what you want with it.' These things don't often happen to me. I think it pushed me forward."
Professor Michael Sanders, director of the experimental government team at the Policy Institute, highlighted the efficiency and dignity of this approach. He noted that unconditional payments are "easier and cheaper to administer" than conditional benefits and "allowed recipients more agency and dignity." Sanders added that many young people spent the money wisely, often saving half for future needs.
Policy Implications and Future Directions
The study's results suggest potential cost savings for public services. Sanders emphasised, "We're saying these young people are less likely to have been arrested and less likely to be rough sleeping—that's a whole bunch of services the Treasury doesn't have to pay for." He advocates for local authorities and the national government to reconsider traditional support methods in light of these findings.
This pilot represents the first UK trial with a sufficiently large sample size to draw quantifiable conclusions on the impact of unconditional cash payments on homelessness. It underscores the transformative potential of timely financial support for vulnerable young people, offering a promising model for addressing social exclusion and poverty.
