Free Money For All Could Solve Our Financial Woes – But Is It Too Good To Be True?

There's a lot the UK could learn from other countries to improve the majority of our lives. New Zealand left us envious recently with its efforts to solve its housing crisis and enthusiasm for a four-day work week, and we're always taking notes from the Nordic countries when it comes to quality of life (on gender equality, happiness... the list goes on).

In the UK, a huge number of us are struggling to survive financially because of the cost of living crisis – with the living wage "failing to cover families' basic needs", households owing almost £19bn in "hidden debt" and millennials bearing the brunt of the fallout from the 2008 financial crisis. Could we solve it by taking inspiration from elsewhere?

The concept of a universal basic income, also known as a citizen's income, has moved from the fringes to the mainstream in recent years. In short, it means that everyone would receive a guaranteed (non-taxable) income from the state – regardless of need or employment status – to cover their basic needs, instead of receiving means-tested benefits. The idea isn't new, but as living costs balloon, the impact of austerity worsens (in June the UN launched an investigation into poverty in the UK), and left-wing politics gain sway, the policy is picking up support in the UK. Supporters argue that it would reduce inequality and give people financial security (and greater freedom) in a difficult and uncertain economic climate.

Several tech giants (including Elon Musk and Mark Zuckerberg), politicians (including Jeremy Corbyn and Bernie Sanders) and economists have also shown support for the idea, while several cities around the world are currently experimenting with basic income schemes, have done so in the past or are planning to. A two-year pilot is underway in a poor district of Barcelona, it's shown positive results in Kenya, and Stockton in California will next year become the first US city to provide a guaranteed basic income for some of its poorest residents. Macau has provided a small basic income since 2008. It's also been experimented with in parts of the Netherlands and Finland, and even parts of Scotland are contemplating trials – so is it something the UK as a whole should consider?

Labour thinks so. In August the party said it would include a pilot of a universal basic income scheme in its next manifesto. The Green Party has had it in their manifesto almost since they were formed in the 1970s, the SNP has many backers, and the Lib Dems have also flirted with the idea over the years. A recent poll found 40% of the public back the policy.

Big campaign groups have been lobbying for its introduction for years and have only stepped up their messaging recently. Barb Jacobson, coordinator for Basic Income UK, a group pushing for the policy, believes universal basic income would give everyone added security and would particularly benefit young women.

"Universal basic income for younger women would mean more would be able to concentrate on their education instead of having to work a job as well, and/or would be able to do the kinds of internships necessary for some jobs," she told Refinery29. "These are only really viable now if you have rich parents who can support you. It could also mean that young women would not have to get into such high levels of debt for their education."

Jacobson also believes it could support voluntary and other unpaid work and give younger people more time to develop their talents and ideas, she added, "or even start their own businesses, rather than being forced to take the nearest available job no matter how unsuitable. Some people call it 'venture capital for the people'."

It would also be particularly beneficial for those with children and precarious employment contracts. "Universal basic income would give people the security of knowing that money will be coming in regularly, no matter what kind of contract they’re on, or if they're raising children or looking after someone," Jacobson continued.

"Most people say that if they had a basic income they would be able to complete their education, spend more time with their families and/or do more for their communities. There is a real crisis of people not having time to look after themselves or each other, caused not just by the cost of living rises and wages flatlining, but the precariousness of many contracts and people having to work multiple jobs to make ends meet."

But not everyone believes free money is the solution to all our social problems. Finland decided against extending a two-year trial in April, while Hamilton in Ontario, Canada, cancelled a three-year trial early despite yielding positive results. Critics also believe the policy is too expensive and risks creating dependency among the poorest in society.

Some also believe there are more effective ways to redress intergenerational inequality in the UK. Liz Emerson, cofounder of the Intergenerational Foundation, told Refinery29 it was "sceptical" that universal basic income would help younger people. "It won't help to rebalance the income and asset wealth inequality that has arisen between older to younger generations," she said, adding that it would also be "prohibitively expensive".

"Far better would be to rebalance the unearned income and asset wealth that older generations have accrued from hoarding housing and housing supply, paying themselves overgenerous pensions and universal benefits, and pulling the drawbridge up behind them," she continued. "That means increasing taxation on asset wealth, for example housing and final salary pensions, and removing unfair overgenerous universal benefits for the one million over-65s living in millionaire households."