Universal Credit Delays ‘Trapping People in Debt’

January 17, 2019

Delays to payments of Universal Credit are effectively trapping people in debt and making it extremely difficult for many thousands of Brits to get by.

The charity group Christians Against Poverty (CAP) has highlighted some of the problems being faced by benefit claimants around the country and said that debts are an increasingly common part of the picture.

“We are seeing more and more unworkable budgets – people left with £10 a month for food or people who went through insolvency with us but are getting back in touch because they’re in debt again, due to Universal Credit,” explains CAP’s chief executive Matt Barlow.

A particular problem is said to be that people are often advised to take on loans from the welfare system in order to cover their costs as they await their first Universal Credit payment.

For many people, taking on any such loan can be a step into debt that then proves extremely difficult to escape from in part because the authorities and distributors of Universal Credit payments are able to take money out of people’s bank accounts at source.

Deductions can be routinely made at source to cover payments for utilities, council tax bills or court fines, which for a lot of people contributes towards making an already bad financial situation worse.

“The truth is most people find themselves in debt as soon as they start to claim,” says Mr Barlow from CAP.

The government has come in for widespread criticism for its handling of the rollout of the Universal Credit system, particularly with regard to the fact that claimants are being obliged to wait five weeks for their initial payments despite having close to zero financial flexibility.

Universal Credit and the issues that people have faced when trying to engage with it have been blamed for making a major contribution to the rise in demand for foodbanks across the UK.

Indeed, the Trussell Trust, which operates foodbanks nationwide, has said that there has been a 51 per cent increase in foodbank use in areas where Universal Credit has been fully rolled out for 12 months, compared to just a 13 per cent rise where the system is yet to be introduced.

If you live anywhere in Scotland and you’re struggling to escape your debts then Scotland Debt Solutions can help. Contacts us directly to arrange a FREE consultation.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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