Universal Credit cut will push 2.3 million into the red
A survey of more than 2,000 people on Universal Credit by the charity found that more than a third (38%) would be in debt after paying just their essential bills if their benefits drop by £20 a week. This is equivalent to at least 2.3 million people.
The figure rises to nearly half (49%) people on Universal Credit in ‘Red Wall’ Tory areas. The average shortfall for people tipped into the red would be £51 a month, increasing to £55 a month in ‘Red Wall’ areas.
The figures come as frontline advisers say they are preparing for a surge in people seeking ‘crisis support’ this autumn. Citizens Advice warns a triple whammy of benefit cuts, rising energy bills and further redundancies as the furlough scheme ends will push families into hardship.
The charity has helped three people a minute with one-to-one advice on Universal Credit since the pandemic began. Nine in 10 of its advisers say they anticipate an increase in people needing support from food banks if the Universal Credit cut goes ahead.
Charlie Young, project manager at Arun and Chichester Citizens Advice, said: “So many families we’re helping are just about managing to scrape by. Take away £20 a week and you push them into the red. It’ll be devastating.
“We’re gearing up to provide more crisis support if the cut happens. That means food bank referrals, fuel vouchers and helping parents of babies and toddlers get access to nappies and milk. This type of support is critical, but ultimately nothing can plug the gap that will be left in people’s budgets if that extra money is taken away.”
Previous research by Citizens Advice shows the unequal impact of the cut, with people one and a half times more likely to claim Universal Credit if they’re in areas the government has targeted for ‘levelling up’.
The charity’s frontline advisers have spoken of particular concerns about single parents being hardest hit by a drop in income given their essential outgoings.
Dame Clare Moriarty, chief executive of Citizens Advice, said: “A cut to Universal Credit this autumn will be a hammer blow to millions of people. It undermines our chance of a more equal recovery by tipping families into the red and taking money from the communities most in need.
“The government must listen to the growing consensus that it should reverse course and keep this vital lifeline.”