Universal Credit has been slammed for “driving people into the arms of loan sharks” following the release of leading debt charity StepChange’s research into problem debt.
The charity has pleaded with the government to urgently reform the controversial benefits system to fix design flaws that are driving people to destitution.
That’s the case for more than half of the charity’s clients who have gone without two or more basic essentials in the past month, according to their new report ‘Problem debt and the social security system’.
We know people visiting #foodbanks face problems with debt and #UniversalCredit. But as @StepChange’s latest report finds, 9 out of 10 people say the 5-wk wait for a 1st payment has caused them unnecessary hardship w/ 27% having to use a food bank to get by > https://t.co/7kgJ9Moupa
— The Trussell Trust (@TrussellTrust) January 23, 2020
A further 27 per cent had recently visited a foodbank, while 10 per cent of clients surveyed in national polling admitted they had been forced to use a loan shark or turn to high-cost credit to make ends meet when social security let them down.
In total, 43 per cent of clients receiving benefits had used credit to pay for essentials over the past year, which played a key role in the development of further debt problems. A quarter of those receiving Universal Credit are in problem debt – three times the rate among the general population and almost double those still receiving legacy benefits.