William Eichler 13 October 2020

Universal Credit does not cover ‘basic day to day living costs’, campaigners say

Four in five people claiming Universal Credit do not have enough money to cover rent, food and bills, shocking new research reveals.

An estimated 5.6 million households across the UK rely on Universal Credit (UC), the Government’s flagship welfare reform.

However, a study conducted by the campaign group 38 Degrees with Universal Credit claimants shows that – in their words – UC ‘simply doesn’t go far enough and people are left struggling.’

The research with 1,904 people claiming UC, of which 37% are new claimants since the coronavirus pandemic, reveals that for more than four out of five (84%) UC payments are not enough to cover food, rent, bills and other essential living costs.

The group’s research also found that 65% have missed meals to cut down on food costs and 51% have gone into arrears on bills or rent.

A single person on Universal Credit (including housing allowance) receives around £680, and a couple with two children receives £1000, but this can vary depending on age, income and housing.

38 Degrees’ research revealed that 46% of the recipients surveyed have used savings to pay for essential expenses, 44% have asked for payment breaks, and 34% have used credit cards to cover payments.

The campaign group warns that with the threat of further job losses as a result of the coronavirus pandemic and the end of the furlough scheme combined with increasing living costs, a four-year benefits freeze and increased cuts, more individuals and families will be reliant on Universal Credit.

In six months, the additional £20-a-week financial support introduced by the Government to help low income families cope with the extra cost of the pandemic is also set to come to an end. This will push an estimated 700,000 of the lowest income households into poverty at the same time the UK is experiencing rising unemployment.

‘There is no doubt everyone is feeling the effects of the coronavirus pandemic, but our research shows those on Universal credit are the ones who are really struggling, and will continue to feel the knock-on effects of the economic crisis,’ said Cathy Warren, campaign manager at 38 Degrees.

‘Universal Credit just isn’t providing them with the level of adequate money needed to cover the basic day to day living costs, and it is extremely concerning that families are having to cut down on food and skip meals just to try and make ends meet.

‘The House of Lords Economic Affairs committee has already found Universal Credit not fit for purpose in its current form and has led to an unprecedented number of people not being able to pay their rent and having to rely on food banks.

‘We are calling on government to do the right thing and review the current system, to make the current £20-a week boost permanent, reduce tax credit debt and ultimately support some of the some of the most vulnerable in society at a time of crisis.’

A DWP spokesperson said: 'This survey covers a tiny sample of less than 0.04% of Universal Credit claimants.

'Meanwhile, during this challenging time we have provided £9.3bn extra welfare support to help those most in need, as well as introducing income protection schemes, mortgage holidays and additional support for renters and constantly keep these measures under review.'

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