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Nearly two million people are set to be around £1,000 a year out of pocket because of the change to Universal Credit.

And nearly five million will end up with around £100 less coming in than they would have had under the old system.

But the analysis, done by the Institute For Fiscal Studies, also found that just over four million people would end up around £100 a year better off.

The thinktank said there would be "winners and losers" under Universal Credit once the transition payments come to an end.

Shadow Work and Pensions Secretary Margaret Greenwood said: “Universal Credit was supposed to lift people out of poverty.

“But this analysis makes clear that it is hitting the poorest hardest.”

The biggest losses (of over £1,000) overwhelmingly hit people in just four groups, the IFS found.

Three-quarters of those losing out by at least £1,000 were either the struggling self-employed; couples with one pensioner; some disability benefit claimants; or people with assets over £6,000.

A DWP spokeswoman said: “This report wrongly assumes that everyone was claiming their full benefit entitlement under the old system, which they weren’t because the system was overly complex.

“With recent work allowances changes, 2.4 million households will be up to £630 per year better off and people will access around £2.4 billion of previously unclaimed benefits.

“Universal Credit supports people into work and helps them increase their earnings while providing a vital safety net for those who need it, while the old system trapped people on benefits or taxed them punitively for taking on more hours."