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Universal Credit cut expected to push millions into hardship


Creditfix > Blog > Creditfix Debt Help Blog > Universal Credit cut expected to push millions into hardship


A staggering 1.5 million working people on Universal Credit could be pushed into hardship this winter.

That’s the warning from Citizens Advice as the benefit is cut by £20 from today (October 6).

New research by the organisation shows two thirds (67%) of working claimants say they’ll face hardship, struggle to cover the cost of bills and stay on top of debt, and may be forced to sell belongings to make up for the shortfall in their income.

What’s more, around one in four working claimants – the equivalent of 600,000 people – are worried they might not be able to pay for food or other basic necessities such as toiletries and heating.

Shopworkers, nursery assistants and security guards are among those seeking its help because they’re worried about how they’ll manage over winter.

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How is Universal Credit changing?

In response to the pandemic, a temporary £20 increase to Universal Credit was introduced, however, the scheme will officially end today.

But just what exactly does that mean for the approximately 2.3 million workers who currently receive Universal Credit in the UK, and the further 1.7 million who are unable to work due to health or caring responsibilities?

The standard allowance for a single person under 25 will decrease by 25% from £79 per week to £59. For a couple, where either one is over the age of 25, their allowance will drop from £137 per week to £117 – a drop of 15%.

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How will people be affected?

As calls for the additional £20 uplift to be reinstated echo across the country, claimants are sharing their stories about how they could be affected.

Front line staff at Citizens Advice have spoken to hundreds of people who are concerned about the cut and aren’t able to increase their working hours to get by.

Weymouth-man Oliver is just one example of a person who has been forced to turn to the organisation for support.

He works in a restaurant three days a week, alternating with his partner to allow them both to care for their school and nursery-aged children. As they are unable to cover the cost of childcare, increasing their working hours simply isn’t an option for Oliver and his partner.

“If we lost that extra £20 a week it’s our children that would suffer. We’d really struggle to pay for their school clothes, equipment and swimming lessons,” Oliver revealed.

“There’s been a rise in the cost of things. Our food bill has gone up but our wages haven’t gone up. I just don’t understand why they’re taking away the money when things are already so hard.”

Cut hailed as a “disastrous decision”

The cut to the £20 uplift has been branded a “disastrous decision” by Citizens Advice Chief Executive, Dame Clare Moriarty.

“With energy bills set to rise and family finances already stretched to the limit, this cut is coming at the worst possible time,” she said,

“Shopworkers, nursery assistants and security guards are just some of the people on Universal Credit seeking our help because they’re already struggling to make ends meet.

“The government has shown in this pandemic that it’s willing to support people through hard times. With a cost-of-living crisis underway, it must reverse the disastrous decision to cut this lifeline.”

Meanwhile on Twitter, Resolution Chief Executive Torsten Bell said that removing the boost would result in “4.4 million households, with 5.1m adults and 3.5m children, (seeing) their incomes fall by £1,000 overnight.

“For 1 million households that will mean an immediate loss of over 10% of their income as we take the basic rate of benefits to its lowest level since 1990.”

Despite the widespread calls for the extra support to be continued, the government has defended its decision. It says the uplift was always intended to be a temporary measure and people getting back to work is the best way to tackle poverty.

Are you a Creditfix client and worried about the Universal Credit uplift coming to an end? Our team is on hand to help guide you through this difficult time, offering support to help you to continue your arrangement with us with affordable monthly payments. If you’re concerned or would like to speak to a member of the team, please contact us on 0800 0431 431.

Where can I get more advice on Universal Credit cut expected to push millions into hardship and other debt solutions?

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