An exclusive report by the Mirror has revealed that 80% of people on Universal Credit say that their payments on the system don’t provide enough to cover essential living costs, forcing them to turn to debt advice firms for advice.
Research carried out by the paper also revealed that 72% of claimants have been forced to borrow money, while 56% are receiving less on Universal Credit than they did on the old system, with some seeing their benefits cut by anything from £150 to a staggering £400 every month.
A previous survey undertaken by UNION confirmed the Mirror’s results, reporting that over three-quarters of people who were on the new benefits system had been forced into debt as a direct result of the benefits system. The study noted that claimants on Universal Credit faced huge struggles with budgeting their benefits and falling into rent arrears.
However, a spokesperson from the Department for Work and Pensions dismissed this study, calling it “completely unscientific,” and stating that there was no evidence that those who responded were even on Universal Credit.
The Trussell Trust has reported a massive increase in foodbank usage in areas where Universal Credit has been in place for over a year, seeing 52% more people having to rely on foodbanks, compared to 13% in places where the benefits system has been in place for three months or less.
Rachel Duffy, the chief executive of PayPlan, a debt advice agency, told the Mirror that this worsening of claimant’s financial situation which then leads them to borrow money is an extremely dangerous situation, which could have “serious consequences” for claimants.
A Department for Works and Pensions spokesperson told the newspaper: “We understand the burden that debt can place on people and safeguards are in place to ensure repayments are affordable and sustainable.
“Our jobcentres can offer budgeting help and signpost people to debt support.”Get your copy of UNITE Magazine