Roy Suryo
A groundbreaking study by King’s College London has revealed that a one-off, unconditional £2,000 cash grant significantly improved the lives of care leavers, reducing their likelihood of experiencing homelessness, hospitalisation, or imprisonment. The research, commissioned by the Centre for Homelessness Impact, found that participants who received the financial boost also reported a marked increase in their overall well-being, including greater optimism and enhanced coping mechanisms for life’s challenges. This contrasts sharply with the well-documented difficulties faced by young people transitioning out of care, who often lack the crucial family safety net that supports their peers.
Leaving the care system without familial support has consistently been linked to a higher incidence of homelessness, unemployment, and involvement with the criminal justice system. The study aimed to quantify the impact of a direct, unconditional cash transfer on this vulnerable demographic. One of the participants, Aeryn Hill, a 22-year-old from the West Midlands, shared her experience, stating that the £2,000 had "made a big improvement" in her life, acknowledging the limited opportunities often afforded to those who have been in care. "We don’t get the opportunity to do things that other people do," she explained.
The UK government-funded pilot study involved 302 individuals aged between 18 and 25. These young people had all been under the care of nine different local authorities across England, who nominated them for participation. Initially, all participants completed an online survey to establish a baseline. Subsequently, 100 of these individuals were randomly selected to receive the £2,000 grant, disbursed from June 2023. Researchers then meticulously tracked the progress of both the recipient and non-recipient groups, conducting follow-up assessments at six and twelve months to gauge the long-term effects of the intervention.
The findings of the study were compelling and multifaceted. Those who received the cash transfer demonstrated a statistically significant reduction in negative outcomes. Specifically, the study found that grant recipients were:
- Less likely to experience homelessness: The financial cushion provided by the grant appeared to offer a vital buffer against housing insecurity, a common struggle for care leavers.
- Less likely to spend time in hospital: Improved well-being and reduced stress levels may have contributed to better physical and mental health outcomes, leading to fewer hospital admissions.
- Less likely to be imprisoned: Financial stability and the ability to meet basic needs can alleviate pressures that might otherwise contribute to involvement in the criminal justice system.
- More likely to report higher levels of well-being: Participants expressed increased feelings of optimism, a greater sense of control over their lives, and an improved ability to manage difficult situations.
- More likely to feel optimistic about the future: The grant seemed to foster a sense of hope and agency, enabling young people to plan and look forward with greater confidence.
- More likely to feel they can deal with problems: With financial resources available, participants felt better equipped to tackle obstacles and overcome challenges.
- More likely to report positive social connections: The grant may have facilitated participation in social activities, strengthening relationships and reducing isolation.
- More likely to contact health services: This could indicate increased capacity to seek support when needed, perhaps due to reduced financial barriers or a greater sense of self-worth.
Intriguingly, the study also noted a behavioural shift in spending habits among the young people who received the cash. Those who received the transfer consistently reported spending 12% less on alcohol, tobacco, and drugs compared to their pre-grant expenditure. This suggests that the grant was not used for impulsive or detrimental spending, but rather for more constructive purposes, potentially addressing underlying needs or providing a sense of security that reduced reliance on such coping mechanisms.
The positive impacts were observed across both the six-month and twelve-month follow-up periods, with some effects being more pronounced at one-year mark, but all outcomes were unequivocally positive. Professor Michael Sanders, director of the Policy Institute at King’s College, highlighted the significance of these findings. "The findings from the trial are encouraging, with consistent positive effects on participants’ housing stability, wellbeing, social connectedness, contact with health services and other outcomes we measured," he stated.
Professor Sanders further elaborated on the broader implications of unconditional cash transfers. "These results highlight the potential benefits of conditional cash transfers, which are not only easier and cheaper to administer than other types of interventions, but also allow recipients more agency and dignity, recognising they themselves are usually best placed to make decisions about their lives," he commented. This emphasis on agency and dignity underscores the ethical and practical advantages of this approach, empowering individuals to make choices that best suit their personal circumstances.
For Aeryn Hill, the grant represented a tangible turning point. She described her initial reaction to being chosen for the money as being "speechless for a good 10 minutes," adding, "These things don’t often happen to me, I’m not a very lucky person." Her experience in care, which involved living with foster parents for two years during her teenage years, was described as a "very mentally taxing experience." She revealed that she has autism and "other issues" that she felt were not adequately understood or supported during her time in care. "It just felt like the only person I had was myself, which really sucks," she confessed.
Despite these significant challenges, Aeryn persevered and managed to attend university, where she is currently pursuing a degree in forensic investigations. She strategically utilized the £2,000 grant to invest in her education and well-being. A substantial portion was allocated to purchasing a new PC for her studies, replacing a slow and unreliable laptop that frequently crashed. "I was working on a laptop that was slow and it kept crashing. I’d been saving for a new PC but when I got the money, it meant I could finally get the thing I really needed to help with uni," she explained. She also used some of the funds to take her partner on a week-long holiday to Liverpool, an experience that likely contributed to her reported increase in social connectedness and overall well-being.
The broader context of care leavers’ outcomes paints a stark picture. Nationally, a concerning one-third of young people leave care and become homeless within two years. Furthermore, approximately a quarter of the prison population has previously spent time in the care system. Care leavers are also significantly less likely to pursue higher education or be engaged in education, training, or employment by the age of 19. These statistics underscore the critical need for effective interventions to support this group.
The efficacy of direct cash transfers in alleviating poverty has been demonstrated in numerous international contexts. Building on these promising results, researchers at King’s College are already embarking on a new project to investigate whether a similar £2,000 unconditional cash grant can be effective in tackling homelessness among adults.
The Centre for Homelessness Impact, the organisation that commissioned the study, has urged local authorities to consider the implications of these findings. They suggest that the positive outcomes should encourage councils to "consider direct financial support for young people leaving care, with no strings attached." This recommendation advocates for a policy shift towards empowering care leavers with the financial resources they need to establish stable and independent lives.
Looking ahead, the researchers have put forth a recommendation for a larger-scale, longer-term study. Such an investigation would aim to determine if greater effects could be achieved by increasing the grant amount or by providing repeated cash transfers. This future research could further refine the optimal approach to using financial support as a tool for social change and improved outcomes for vulnerable young people.
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