Report highlights impact of Wales’ basic income scheme for care leavers

A pioneering basic income scheme for care leavers in Wales is delivering early positive impacts, with participants reporting greater financial security and independence, according to a new evaluation report.

However, concerns remain over how they will manage once the payments stop.

The scheme, launched in July 2022, provides eligible care leavers with £1,600 per month (before tax) for two years—one of the most generous basic income trials in the world.

The latest evaluation, led by Cardiff University’s CASCADE research centre, found that recipients have used the money to secure housing, access education, and improve their mental well-being.

Jane Hutt, Cabinet Secretary for Social Justice, said the scheme was about giving young people the chance to succeed:

“We know that too many young people leaving care face disadvantage as they transition into adulthood. This pilot aims to change that by giving them the security they need to focus on their future, rather than just surviving day-to-day.”

Financial stability, but a learning curve

Many care leavers reported that the basic income reduced financial stress and helped them feel more in control of their lives.

Some spoke about how it had allowed them to avoid insecure jobs or exploitative relationships.

However, the report noted that some recipients initially made unwise spending choices, though these were seen as part of a “learning curve” rather than long-term habits.

One young person commented: “Younger me wouldn’t know what to do with that money… I’d have gone on a spending rampage. But now I realise it’s a blessing.”

Some professionals had raised concerns that the payments could make young people more vulnerable to exploitation or substance misuse, but the evaluation found no substantial evidence of this in interviews with participants.

Concerns over the end of the scheme

With payments due to end by mid-2025 for the first cohort, some care leavers expressed anxiety about the transition.

The report highlighted that many will face a sharp drop in income, particularly if moving onto Universal Credit, which provides significantly lower financial support.

One participant said: “We’ve had £1,600 a month… then suddenly you drop to £72 every two weeks. Even if you’re prepared, that’s a big change.”

Some suggested a longer support period or a gradual reduction in payments to help ease the transition.

Others felt the pilot should be tied more closely to individual needs, rather than a fixed two-year period.

Implementation challenges

The evaluation also found that the rapid rollout of the scheme had created administrative hurdles, particularly for local authorities delivering it.

While the scheme was expected to reduce bureaucracy, the report suggests that complex administration remains an issue.

Despite these challenges, 97% of eligible care leavers took part, and the next phase of the evaluation will assess long-term impacts on employment, education, and well-being.

Future of the pilot

Further reports, due in 2026 and 2027, will compare the experiences of care leavers who received the basic income with those who did not.

The Welsh Government is also developing a long-term evaluation framework to track the impact of the scheme beyond 2027.

Jane Hutt emphasised the Welsh Government’s commitment to learning from the pilot:

“This evaluation provides valuable insights, and we will use this evidence to inform our long-term approach to supporting care leavers.”

While the pilot is not currently planned for expansion, its findings could shape future policy on financial support for care leavers in Wales and beyond.