News

700,000 households don’t receive enough from universal credit to pay rent

Department of Work and Pensions figures show ‘eye-watering impact’ of local housing allowance freeze on renters

Universal Credit money not covering rent

Thousands of families are struggling to cover rent while on benefits. Image credit: Nick Fewings / Unsplash

More than 700,000 families do not receive enough money from universal credit each month to cover their rent, according to new Department for Work and Pensions (DWP) figures.

Statistics show more than 1.2 million families are in receipt of local housing allowance (LHA) – which is paid as part of universal credit to help with housing costs – across England, Scotland and Wales but around 700,000 pay rent that exceeds support. On average, families in England find themselves a £100 short every month, a total slightly higher than in Scotland and Wales.

Labour’s shadow work and pensions secretary, Karen Buck, released the statistics following a written parliamentary question and was told by government ministers that discretionary housing payments (DHPs) will “deal with the shortfall”. DHPs are payments available from councils to help with housing costs. 

But the Westminster North MP shared the figures warning: “All this before the ban on evictions is due to be lifted shortly, and with the temporary £20 a week uplift to universal credit still due to end this summer.”

Overall, 630,000 households in England have seen their rent outstrip their local housing allowance alongside 34,000 in Scotland and 37,000 in Wales.

Single adults are most likely to face the issue, making up more than half of the totals in each of the three countries.

The statistics also show how many disabled claimants are in the same situation, amounting to 56,000 familes in England, 4,200 Scottish households and 5,400 in Wales.

In response to Buck’s question, DWP minister Will Quince said the UK government had increased local housing allowance rates since the start of the pandemic, tying them to 30 per cent of the median rent for a local area.

Quince added that the Westminster government had invested “nearly £1bn to provide 1.5 million claimants with £600 extra housing support” during the pandemic but local health allowance rates will remain at the “same levels from April 2021”.

But Marc Francis, director of policy and campaigns at anti-poverty charity Zacchaeus 2000 Trust, warned that the Westminster government’s decision to freeze local housing allowance could see tenants in the private rented sector facing eviction.

While the LHA rates represented 30 per cent of the median rent for local areas last year, claimants face the prospect of losing out as inflation rises during the economic recovery.

Article continues below

Current vacancies...

Search jobs

More than six million people turned to universal credit during the pandemic while bailiff-enforced evictions are paused until May 31 in England. Wales has similar protections in place until June 30 while sheriff officers will be unable to attend a property to serve notice or carry out an eviction until September 30 in Scotland.

Francis said: “These figures reveal the eye-watering impact of the “freeze” on local housing allowance rates for tenants in the private rented sector – a majority are now left well short of what they need to pay the rent, forcing them to choose between living below the breadline or falling into arrears and facing eviction.

“It’s absolutely shocking that so many disabled and seriously unwell people are amongst those hit. Last year’s decision to peg rates back at the 30th percentile of the  local market helped, but this has already been undermined by the Chancellor’s decision to freeze them again this year.  It shows why it is so essential for ministers to peg LHA rates back at the median as they were before 2010.”

The Big Issue is offering free training and job search help to anyone who needs it with our new RORA Jobs and Training Toolkit. Sign up to receive a free three-month digital subscription to The Big Issue, access to dozens of free or discounted online training courses and the ability to search hundreds of thousands of jobs.

If you are out of work or worried about work and looking for immediate, practical advice call The Big Issue Jobs helpline on 0204 534 2810 or email RORAhelp@momentagroup.com

Support the Big Issue

For over 30 years, the Big Issue has been committed to ending poverty in the UK. In 2024, our work is needed more than ever. Find out how you can support the Big Issue today.
Vendor martin Hawes

Recommended for you

View all
I started doing crime by age 6. I didn't know any other life – all my birthdays were in prison
Crime

I started doing crime by age 6. I didn't know any other life – all my birthdays were in prison

Local housing allowance is finally going up. But is it anything more than just a short-term fix?
Jeremy Hunt announced local housing allowance rise
Benefits

Local housing allowance is finally going up. But is it anything more than just a short-term fix?

Calls to nationalise Thames Water as Brits face 40% increase in bills: 'A con and a disgrace'
Water bills

Calls to nationalise Thames Water as Brits face 40% increase in bills: 'A con and a disgrace'

Will free school meals and vouchers be offered over the Easter holidays?
Free school meals/ Easter holidays
Free school meals

Will free school meals and vouchers be offered over the Easter holidays?

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Here's when UK households to start receiving last cost of living payments
next dwp cost of living payment 2023
3.

Here's when UK households to start receiving last cost of living payments

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know