Housing benefit changes will hit unemployed people hardest, and pensioners and low-paid workers will also be affected

This article is more than 10 years old

This article is more than 10 years old

Almost a million of the poorest people in Britain will lose on average £12 a week next year – a drop of up to 17% of their disposable income, according to a government analysis of housing benefits cuts announced in last month's budget.

The figures show that 170,000 pensioners, 240,000 low-paid workers and half a million others will be affected.

The greatest impact will be felt by the unemployed, who will have to find an extra £11 a week to pay their rents – their jobseeker's allowance is £65.

More than 40,000 households will lose more than £1,000 a year.

The government says the cuts are necessary as the cost to the taxpayer of housing benefit expenditure is now £20bn – double that of a decade ago.

The government's analysis looks only at the effect of changes next year. These will cap the amount of housing benefit allowance, peg the amount of support to the bottom third of rents in the claimant's borough and remove a £15 incentive paid to families who seek cheaper accommodation.

There have been persistent warnings from campaigners that the draconian nature of the reforms will lead to parts of the country being emptied of poor people.

Helen Williams, assistant director at the National Housing Federation, said: "Almost 100% of claimants will be worse off. There's a very real risk that these cuts will push hundreds of thousands of people into poverty, debt and even on to the streets if they end up being evicted."

Labour said the "figures prove that the government's housing benefit cuts will push thousands of people into poverty and homelessness".

Yvette Cooper, the shadow secretary for work and pensions, said: "Almost every private sector tenant in the country on local housing allowance is going to be badly hit by these plans – including over 50,000 of the poorest pensioners."

Cooper described the measures as just the "tip of iceberg", representing less than a third of the putative savings of £1.76bn outlined by the coalition government. "Shocking that this is just the tip of the iceberg, as these only include figures for 2011, when many more cuts come in after that," she said.

Today the Department for Work and Pensions appeared to accept that the changes would leave some people in receipt of housing benefit unable to rent properties in prosperous parts of the country.

"What these reforms mean is that people receiving housing benefit may not be able to live in expensive city centres, but the same applies to most working families who do not receive benefit," it said.

The minister for welfare reform, Lord Freud, a former Labour adviser, said that the previous government had let housing benefit "spiral out of control" and left families "in properties which they could never afford to maintain".