Universal Credit expansion is “a disaster waiting to happen”

Citizens Advice is warning that new findings show that Universal Credit is pushing people further into debt.

Universal Credit expansion is “a disaster waiting to happen”

Universal Credit merges six existing benefits into one, including tax credits, housing benefit and employment and support allowance.

The charity said the government’s plans to accelerate the roll-out of the benefit from five to 50 areas a month from October could have catastrophic consequences, as there are still many problems with the system including the long wait for first payment.

Citizens Advice is urging the government to ensure no one applying for Universal Credit waits longer than six weeks for an income, and that anyone who needs it gets a payment within two weeks that they do not need to repay.

Recent research from Citizens Advice, published this month, analysed more than 50,000 cases where it has helped people with debt problems.

It found 79 percent of those on Universal Credit have priority debts such a rent or council tax, putting them at greater risk of eviction, visits from bailiffs, being cut off from energy supplies and even prison. This is compared to 69 percent on legacy benefits such as Jobseekers Allowance or Housing Benefit.  

More than 40 percent of people on Universal Credit have no money available to pay creditors as their monthly spend on essential living costs is more than their income. The charity said that, typically, these people only have around £3 a month left to pay creditors.

The charity is also renewing its call for the roll-out of Universal Credit to be paused until problems with the benefit are fixed and for the government to ensure support is in place to help people adapt as they move onto the new benefit.

Citizens Advice chief executive, Gillian Guy, said: “While the principles behind Universal Credit are sound, our evidence shows that if the government continues to take this stubborn approach to the expansion of Universal Credit, it risks pushing thousands of families into a spiral of debt, and placing an even greater strain on public services.”