Charities and campaign groups have been left broadly underwhelmed by the creation of a new financial support fund designed to help low income households get by this winter.
The government has committed to distributing £500 million to people across the country that are struggling to cover the costs of their most essential outgoings.
Those funds are to be distributed via local councils in England and via the devolved administrations in Scotland, Wales and Northern Ireland.
Announcing the details of the government’s plans, chancellor Rishi Sunak said: “Everyone should be able to afford the essentials, and we are committed to ensuring that is the case.
“Our new Household Support Fund will provide a lifeline for those at risk of struggling to keep up with their bills over the winter, adding to the support the government is already providing to help people with the cost of living.”
However, an array of charities and campaign groups remain fearful of the impact that the government’s decision to remove the £20 uplift to Universal Credit will have on the finances of millions of British families.
Helen Barnard, deputy director of the Joseph Rowntree Foundation, said of the new £500 million fund that it “does not come close to meeting the scale of the challenge facing millions of families on low incomes”.
A particular criticism of the new fund is that because it provides access only to grants that it will not offer any real financial stability to struggling households.
“It would be far better if the main benefit for people on low incomes did its job and allowed them to afford basics like food, clothes and heating,” noted Imran Hussain, a director with the charity Action for Children.
StepChange, the debt help charity, is also worried that from a personal debt perspective the new fund will do little to help the three million people it estimates turned to high cost credit to get through the pandemic.
“£500 million in a discretionary fund won’t plug the ongoing holes in household budgets, particularly when £6 billion of Universal Credit is due to be cut,” explained Richard Lane from StepChange in a statement.
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Millions of low-income households across the UK are being dragged down by debts they accumulated during the pandemic.
People with debt problems should not be afraid to confront the realities of their circumstances and tackle them head on, according to the expert money adviser Martin Lewis.
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