Universal Credit not covering daily living costs and causing more debt across the UK

Three-quarters of people who are already in debt across the UK have had to borrow more money to cover daily living costs since receiving Universal Credit, according to new data,

The survey of more than 6,000 people, who have already sought advice from free debt help provider PayPlan, also shows 80% of respondents don’t have enough money to cover basic bills now they’re on Universal Credit. As a result they’ve had to cancel household payments, miss medical appointments as they can’t afford the travel costs and, in some cases, go without food.

A PayPlan client from Cumbria who is a single mum to two young children said: “The five week wait for the first Universal Credit payment was a struggle for us and I ended up in more debt trying to pay bills and feed my family during that time. This is a long time for any family to wait with no money, especially when you’re not working.”

Rachel Duffey, CEO of PayPlan, said: “Results from our survey are very eye opening. It’s extremely sad to hear how people are so much worse off when receiving Universal Credit compared to their previous benefits”.

Another PayPlan client from London said: “The amount of Universal Credit I receive does not cover my living expenses and I’ve had to cut back where I can, including supermarket shopping. I often don’t eat for days as I can’t afford to buy food, which is very dangerous with my diabetes. I’ve resorted to selling things online to try and earn some money as it’s the only way to make ends meet.”

Rachel Duffey continued: “A real mix of people have expressed their concerns, including families, single parents and others who are unable to work as they’re carers or have health issues.

“Some PayPlan clients also suffer from long-term vulnerabilities, including terminal illness, physical disabilities, learning difficulties and various mental health problems, which means they sometimes have no way of paying off their debts. We need to make sure that these people gain the support needed to manage their finances if they’re worried how Universal Credit will affect them.”

PayPlan, the UK’s largest provider of free debt solutions works to help ordinary people to live comfortably whilst becoming debt-free.

Universal Credit replaced Income Support, Jobseeker’s Allowance, Housing Benefits, Working Tax Credits, Child Tax Credits and Employment Support Allowance. It rolled out in full in December 2018.

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