William Eichler 18 June 2020

Nearly two thirds of families on Universal Credit stuck in debt ‘nightmare’

Two charities have called on the Government to increase the child element of Universal Credit by £20 to help struggling families ‘stay afloat’ during the Covid lockdown.

New research by the Joseph Rowntree Foundation (JRF) and Save the Children has found that six in 10 families on Universal Credit (UC) and Child Tax Credits have been forced to borrow money since the start of the crisis, with many relying on payday loans or credit cards.

Around 70% of families have also had to cut back on food and other essentials, while half have fallen behind on rent or other household bills.

Two-thirds of those surveyed also reported that concerns about money had affected their mental health with around a quarter reporting a severe impact.

Save the Children and JRF argue that a £20 increase to the child element of UC will provide an ‘urgent, temporary lifeline’. It is the equivalent of £2.85 per child, per day.

‘Providing an urgent uplift of £20 per week to families with children claiming Universal Credit or Child Tax Credits can keep many from being pulled into poverty, especially where parents have lost work as a result of the pandemic,’ said Helen Barnard, the acting director of JRF.

‘By taking action now, we can ensure that the human suffering of this tragic pandemic is not compounded by rising child poverty, damaging life chances and holding a generation back in the years to come.’ Dan Paskins, the director of UK Impact at Save the Children, commented:

‘Life at the moment is especially hard for families forced to make impossible choices about whether to put food on the table or money in the electricity meter.

‘A £20 a week increase will give families with children the lifeline they need to pull them through these difficult times.

‘Every child should have the toys and books they need to learn and play. They shouldn’t have to worry because their parents are struggling with low pay, insufficient benefits, fear of losing their job, debt and rising costs.’

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