Mental health effects of Universal Credit during COVID-19: a difference-in-differences analysis of UKHLS data

Publication type

Journal Article

Authors

Publication date

September 16, 2026

Summary:

Background: Pre-COVID-19 pandemic evidence suggests that the UK’s introduction of Universal Credit (UC) was associated with a deterioration in mental health. Given pandemic-related changes to the benefits system, we sought to evaluate the mental health effects of UC during the pandemic.

Methods: We used nationally representative individual-level UK Longitudinal Household Panel Study data (2018–2021). We employed a difference-in-differences analysis with individual and time fixed effects comparing UC to legacy claimants (excluding Working Tax Credit claimants). The self-reported General Health Questionnaire (GHQ)-36 served as our main continuous outcome, while the GHQ-12 served as a supplementary caseness measure (≥3).

Results: Claiming UC during the COVID-19 pandemic reduced psychological distress compared with the comparison group, even after adjusting for confounders (−0.96 (95% CI −1.63 to −0.30)). After adding additional controls the estimates remain similar (−0.86 (95% CI −1.56 to −0.18)). When measured by GHQ-12 caseness, it was also associated with a reduction in the prevalence of psychological distress, but this was less certain due to wide CIs (−0.05 (95% CI −0.10 to 0.00)) and was more uncertain still after adjustment for further confounders (−0.04 (95% CI −0.10 to 0.01)). Event-study models showed that the greatest reduction in psychological distress was experienced during the first treatment year (−0.97 (95% CI −1.77 to −0.17)), without any significant effect 1 year post-treatment (0.12 (95% CI −1.23 to 1.46)).

Conclusion: Our findings suggest that during the COVID-19 pandemic, the psychological distress of UC claimants was reduced in the short-term compared with a group of legacy claimants—although with some uncertainty across alternative measures. This suggests that the pre-pandemic negative mental health effects of UC may be ameliorated by welfare reforms that aim to increase the generosity and reduce the conditionality of UC.

Published in

Journal of Epidemiology and Community Health

DOI

https://doi.org/10.1136/jech-2026-225938

ISSN

143005

Subjects

Notes

Online Early

Open Access

© Author(s) (or their employer(s)) 2026. Re-use permitted under CC BY. Published by BMJ Group. https://creativecommons.org/licenses/by/4.0/

This is an open access article distributed in accordance with the Creative Commons Attribution 4.0 Unported (CC BY 4.0) license, which permits others to copy, redistribute, remix, transform and build upon this work for any purpose, provided the original work is properly cited, a link to the licence is given, and indication of whether changes were made. See: https://creativecommons.org/licenses/by/4.0/.

Uses Understanding Society data (not Understanding Society - COVID-19 Study, 2020)

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