Earlier this month Scope released the first in a series of reports that look in depth at the challenges within disabled people’s living standards.
When we talk about improving living standards in the UK, we often think of economic growth, prices and wages. But what is rarely recognised is a problem that affects disabled people’s living standards that pre-dates the recession – one owing to the additional costs of disability.
Today, we launch the second in our series of reports – Priced Out: ending the financial penalty of disability by 2020. The report brings together new research and analysis to investigate the extra costs disabled people face and how to tackle them.
Disabled people pay a financial penalty on life, which can be because of:
- Having to buy more of everyday things (like heating, or taxis to work)
- Paying for a specialist items (like a wheelchair or a hoist)
- Paying more than non-disabled people for same products and services (like insurance)
Over 20 years ago – recognising this financial penalty- a Conservative government introduced Disability Living Allowance (DLA) to help cover the extra costs of disability.
Yet disabled people still feel their effects and:
- Are twice as likely to have unsecured debt totalling more than half of their household income
- Are three times more likely to use door step loans
- Have on average £108,000 fewer savings and assets than non-disabled people
- Have less pension wealth – in the 55-64 age groups, the gap in the level of private pension wealth held by disabled and non-disabled people is £125,000
Not only is financial instability bad for disabled people, but as people in the UK are living longer failing to address the problems posed by a growing, and significantly under-pensioned segment of the population, will have ramifications for the living standards of the UK as a whole. Tackling extra costs is therefore a policy imperative.
With a general election rapidly approaching, and with signs of economic growth in the UK beginning to show, there is an opportunity for political parties to set out what they will do to end this financial penalty by 2020, and make sure that disabled people are part of fair, inclusive growth.
Protecting crucial extra costs payments
DLA has been crucial for disabled people to lead independent lives, to take up opportunities, increase their own income and contribute to their communities.
But recent and planned welfare reform threatens these important payments.
DLA is being replaced by Personal Independence Payments (PIP). But PIP assessments do not ensure those who need support get it. 600, 000 disabled people are set lose DLA through its reform.
And in the Budget 2014, the Chancellor announced that starting in 2015-16 an overall limit of £119.5 billion will be placed on parts of social security spending.DLA and PIP are planned to be within the cap and are at risk of being cut because of it.
- Last week an independent review of PIP assessments was announced. We call on the Government commit to replacing the current assessment of extra costs with a new one that more accurately identify disabled people’s extra costs.
- The Government protect extra costs payments such as DLA and PIP by taking them out of the cap or ring-fencing them within it.
Making extra costs payments go further
Extra costs payments do not go far enough. DLA and PIP do not cover all extra costs. Therefore disabled people are still more likely to be in debt and unable to build savings and contribute to pensions.
The Government make extra costs payments go further by committing to an extension of the ‘triple lock’ guarantee on pensions to extra costs payments in the next parliament – meaning they will rise by the highest of prices, earnings or 2.5% each year.
Driving down extra costs
Where extra costs can be driven down, they ought to be. Currently, only the Department for Work and Pensions (DWP) has responsibility for tackling the problem of extra costs. But in reality, all departments have a role to play. For example, research shows that inaccessible housing can dirve up contribute extra costs.
The Government and all political parties commit ensuring truly cross-departmental policy-making to identify and drive down the root causes of extra costs by placing the Office for Disability Issues (ODI) in the Cabinet Office.
Often things disabled people need to buy are very expensive – such as £3500 for a Lightwriter which turns text into speech. Affordable products to adapt mainstream tablets (which cost between £200 and £600) are not commonly available. And sometimes disabled people have to pay more for things just because they are disabled – for example facing large supplements for travel insurance based on their condition.
The Government, business and regulators re-balance markets so that they work better for disabled people. For example the Government should create a new funding stream as part of the Growth and Innovation Fund (GIF) from the Skills Funding Agency which invites employers in the relevant sectors to apply for investment in skills of their workforce, specifically to innovate for disabled people.
This approach will go some way in ending the financial penalty disabled people pay by 2020. This will raise disabled people’s living standards, and ensuring there is fair, inclusive growth which does not leave disabled people behind.
Later this month Scope will publish the third in this series. It will look at what the Government can do to create better job opportunities for disabled people.
In the Summer Scope will be launching a Commission on Extra Costs to investigate why there is a premium attached to the goods, services and infrastructure (housing and travel) disabled people use and what can be done to bring them down.