Laura Sharman 23 January 2020

Universal Credit causing 'debt and destitution' charity warns

Universal Credit is driving vulnerable people to use loan sharks, a debt charity has warned today.

StepChange said that flaws in the social security system are causing debt and destitution.

It found that half of its clients claiming benefits meet the official definition of destitution, with 10% using a loan shark due to problems linked to social security.

Nearly a third (27%) had recently used a food bank, with 43% using a credit card to pay for essentials over the past year.

The charity is calling for the Government to end the five-week wait period for Universal Credit, introduce discretionary hardship payments and overhauling the system of deductions to repay debt.

StepChange Debt Charity head of policy, Peter Tutton, said: 'We already knew that too many people are experiencing hardship and misery through problems with the Universal Credit system. What is new is the evidence of exactly how Universal Credit actively worsens debt problems, more so than the legacy benefits system.

'Sending people into the arms of loan sharks, and making a debt situation worse at the very time when people most need help, cannot possibly be what social security is for. It’s time to put these problems right.'

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