The universal credit cut comes as a “devastating” blow to millions of people on low incomes, campaigners have said, as ministers go ahead with the widely condemned rollback from Wednesday October 6.
When the government increased payments by up to £20-per-week at the start of the pandemic, it was framed as a temporary support measure to support households through the Covid-19 crisis. But the increase barely compensated for a decade of social security freezes and cuts, experts said, and the pandemic is still having a significant effect on household budgets.
The government today cuts payments back to pre-Covid levels, taking £1,040 from the annual incomes of claimants. The nearly six million people reliant on universal credit now face what devolved government leaders have called a “cost of living crisis” as fuel and food bills soar, jobs are put at risk by the end of furlough and wages fail to keep up with daily expenses.
“This is a devastating blow which will push thousands even further into debt,” said Richard Lane, director of external affairs at StepChange. “With £20 a week withdrawn from their budget, the monthly deficit of the average StepChange client relying on universal credit will triple, from -£40 to -£126.
“This means more people will be faced with agonising choices between paying their rent or feeding their families, skipping meals, or turning to high-cost credit just to get by.”
The government’s £500m household support fund, announced last week and to be distributed by local authorities on a case by case basis, will help people deal with “one-off emergencies”, Lane added. “But when faced with today’s cut, along with the end of furlough, rocketing energy prices and rising inflation, millions will face a daily battle just to get by.”