UBI FAQs

What is Universal Basic Income?

UBI is a regular and unconditional payment given to everyone every week or every month. Everyone receives it regardless of their income, wealth or employment status.

It guarantees a basic level of financial security for everyone. It makes sure nobody in society falls through the cracks. It supports people doing unpaid work, such as caring for relatives.

How much would everyone get?

Different proposals suggest different amounts of UBI. Most proposals in the UK range between £50 to £150 per week for adults, and £30 to £80 per week for children.

In their manifesto for the 2019 election, the Green Party proposed a UBI in the UK of £89 a week.

Economist Karl Widerquist has proposed a UBI of £7,706 per adult per year. This is around £148 a week.

Andrew Yang proposed a UBI of $1,000 a month for every American adult in his presidential campaign.

Some proposals are lower or higher than these.

Would UBI replace all benefits?

No. Most UBI proposals keep Housing Benefit and disability benefits. Many UBI proposals replace Child Benefit with a more generous UBI for children.

Most UBI proposals replace some means-tested benefits like Jobseeker's Allowance and tax credits. All serious UBI proposals would make lower and middle income households better off.

Would a UBI benefit everyone?

UBI would raise the incomes of millions of lower and middle income households. The vast majority of people in the UK would be better off than they are now.

Some high earners would be slightly worse off than they are now. But evidence from The Equality Trust shows that even higher earners have a better quality of life in more equal societies.

Many lower and middle income households are currently one unexpected payment away from debt. A 2016 study found that 16 million people in the UK have less than £100 in savings. A UBI would help people pay their bills or cover unexpected payments without going into debt.

A UBI would reduce poverty. In time, it could end absolute poverty completely. A UBI would end the need for food banks and would stop people becoming homeless because they can’t pay their rent.

Do very rich people get paid a UBI?

Yes. But the highest earners would effectively pay their UBI back in increased tax. The very richest would pay much more tax than they would receive in a UBI. This would help fund a UBI for everyone.

Isn't it better to target financial help at the poorest?

Targeted benefits have to be means-tested. Means-tested benefits are complicated and bureaucratic. Millions of low-income households currently miss out on benefits they are eligible for. Arbitrary cut-off points also punish those who are ineligible.

A UBI guarantees support for everyone by providing an income floor nobody can fall below. A UBI is a fair, effective and simple way of guaranteeing support for everyone.

How much would a UBI cost?

When talking about the cost of a UBI, it's important to distinguish the gross cost from the net cost.

The gross cost is the total amount paid out per year in a UBI for everyone.

The net cost is the total amount paid out in a UBI minus the money it would save. For example, higher taxes or a lower mental health budget would cancel out some of the cost of a UBI.

Critics of UBI will often use the gross cost to make it seem more expensive than it is. When talking about the cost of a UBI, we should always use the net cost. If the UK put a UBI in place, the net cost would be the real cost.

In the UK, economist Karl Widerquist has modelled a UBI of £7,706 per adult and £3,853 per child, per year. The net cost would be £67 billion per year. This is 3.4% of GDP, and about a third of the gross cost.

How can we pay for a UBI?

The UK spends over £93 billion per year on corporate subsidies and tax breaks. We could pay for a modest UBI solely by ending these subsidies and tax breaks. We could also pay for it by raising taxes on higher earners, or introducing new taxes. Carbon taxes, financial transaction taxes and land taxes could all pay for a UBI.

There are many different ways to pay for a UBI, but all show that a UBI for everyone is easily affordable.

What political support is there for a UBI in the UK?

Political support for a UBI is growing rapidly in the UK.

The Green Party have supported a UBI since the 1970s. Introducing a UBI was a central policy of their 2019 election campaign.

Liberal Democrat leader Ed Davey is a supporter of UBI. UBI will probably become official party policy in autumn 2020.

The SNP have commissioned a report looking at how easy it would be to trial UBI in Scotland. In May 2020, First Minister Nicola Sturgeon said that the "time has come" for a UBI.

Hundreds of MPs in the Labour Party called for an Emergency UBI during the pandemic. The party's 2019 manifesto included a promise to pilot UBI in England. Although there is currently no party policy on UBI, Deputy Leader Angela Rayner supports piloting it in the UK.

Plaid Cymru leader Adam Price described an Emergency UBI as "by far and away the best solution" to the economic crisis caused by coronavirus.

The Alliance Party in Northern Ireland support a UBI. Politicians from Sinn Féin, the DUP and the SDLP have all shown interest in the idea.

The current Conservative government have rejected the idea of UBI. But veteran Conservative MP Sir Edward Leigh said that a UBI was "worth serious consideration" during the pandemic.

What's the difference between a permanent UBI and a 'Recovery' or 'Emergency' UBI?

Some organisations, including UBI Lab, have recently proposed a 'Recovery' or 'Emergency' UBI. This is in response to the recession caused by coronavirus. These forms of UBI would be for a limited period of time and would be much higher than a permanent UBI.

The point of an emergency or recovery UBI is that it would be a financial stimulus. This means that it would deliberately put lots of money into the economy to boost activity.

You can read UBI Lab's proposals for an Emergency UBI and a Recovery UBI.

Is there anything similar to UBI in the UK?

The NHS is similar to a UBI. We all have access to it, and we all pay for it through tax. It guarantees healthcare to everyone - even the very rich. The highest earners pay more in tax to guarantee healthcare for everyone.

Schools are also similar to a UBI. They guarantee primary and secondary education to everyone. High earners might not use state schools, but they still have access to them and still have to pay for them through tax.

We already have the State Pension and Child Benefit. These work similar to a UBI in that they give large numbers of people a level of basic financial security without means-testing.

What effect would UBI have on the economy?

Putting more money into everyone's pockets would boost consumer demand. This would benefit local businesses and high streets across the UK. The FT has described a temporary UBI as an "obvious option" to support an economic recovery from coronavirus.

Have any other countries introduced UBI?

Not across an entire country. But the US state of Alaska have a version of UBI called the Permanent Fund Dividend. It's a yearly payment to every Alaskan resident paid for by a levy on oil revenue.

The amount paid out each year changes according to the amount of oil discovered. In 2019, each eligible resident received $1,606. In 2020 the payment was $992. This is much lower than most proposals for a permanent UBI.

Since Alaska introduced the dividend in 1982, full-time employment has remained steady. Part-time employment has increased slightly. Research has found that the modest dividend has had a positive impact on child health.

Have any other countries trialled a UBI?

Yes. Many countries across the world have piloted forms of UBI since the 1970s. All pilots have found moderate or major improvements to participants' health and wellbeing. No pilots have found significant reductions in employment.

The most comprehensive pilot so far took place in Finland between 2017 and 2018. It involved 2,000 unemployed people who received a UBI of €560 (£490) a month. The results found major improvements in mental health, confidence and life satisfaction.

The Finnish pilot found that employment increased slightly. Recipients of a UBI worked six days more per year on average compared to a control group who didn't receive a UBI.

Effects found in other pilots include:

• reduced indebtedness

• reduced crime

• increased school attendance

• greater trust in institutions

• more people starting or expanding small businesses

• reduced stress

• reduced depression

• reduced hospitalisation

Vox have created a guide to some of the other pilots that have happened around the world. The UBI Lab Network want the UK government to pilot UBI in this country.

Is it true that UBI failed in Finland?

No. It has been wrongly claimed that the Finnish UBI pilot failed due to the preliminary results. The final results showed positive effects on health, wellbeing and employment. These results effectively replace the preliminary results.

It is also claimed that the Finnish government cancelled the pilot. This is also not true. The pilot ran for its designed two-year duration and was not extended beyond this. The Finnish government are now analysing the results.

Would UBI increase poverty?

No. Opponents of UBI, including some Conservative MPs, have falsely claimed that a UBI would increase poverty. This comes from a misreading of a 2016 report by Compass and the Joseph Rowntree Foundation.

The co-author of the report, Stewart Lansley, has recently corrected these misleading claims. Lansley says that UBI would be "a significant new anti-poverty instrument and safety net."

No serious UBI advocates would support a basic income that increased poverty or made people on low incomes worse off.

Economist Karl Widerquist recently found that a UBI could end absolute poverty in the UK entirely. It would also substantially reduce other measures of poverty:

• UK families with incomes below the official poverty line would drop from 16% to 4%

• Poverty among children and the elderly would all but disappear

He also found that the UK "can easily afford" a UBI that ends absolute poverty.