Managing Money on Universal Credit
Managing Money on Universal Credit [ 0.56 mb] - full report
Universal Credit is one of the biggest changes to the welfare system since its inception. Bringing together six existing benefits, by the time it has rolled out around 7 million families will be receiving the new benefit - more than half of which are working families. This is a hugely ambitious programme, seeking to simplify the existing complicated benefit system and incentivise more people to start and progress in work.
Since Universal Credit was rolled out we have helped over 190,000 people with issues relating to Universal Credit.
Managing Money on Universal Credit [ 0.56 mb] shows that while changes introduced by the Government since 2017 have started to help people they’ve only made a dent in the problem rather than fixed it. People face particular problems during the five week wait for a first payment but financial problems can last beyond this. Universal Credit is paid in rigid ways that make it hard for some to budget and leaves little financial wriggle room, and deductions for debt repayments are common.
Further changes are needed so that people are paid enough to live on and in a way which reflects people’s lives and how they budget.
The wait for an initial payment still leaves half of the people we help unable to keep up with bills, rent or going without essentials.
7 in 10 (70%) of the people we see on Universal Credit who take out advances are also getting into arrears on bills or rent.
Debt problems are more common for the people we help with Universal Credit than those claiming legacy benefits, with 24% of people we helped also seeking debt advice.
Only 45% of people we helped last year who were in work before claiming Universal Credit were paid monthly.
Deductions in Universal Credit were experienced by more than half of all claimants in September 2018.
What Citizens Advice is calling for:
To meet the scale of challenges still affecting people who claim Universal Credit more action is needed. Some long term changes to the design of UC should be explored, but today’s challenges also require action sooner than current proposals are set to be enacted.
Make sure people can access adequate financial support at the beginning of their claim and look to improve Universal Credit design to reduce the wait.
Ensure Universal Credit provides enough to live on by reviewing how benefit rates are set and ensuring deductions are manageable.
Help people to budget by designing Universal Credit around real lives, providing greater flexibility in how UC is paid and income is assessed.