Universal Credit is leaving people trapped in a debt spiral and unable to afford their basic living costs.
Exclusive research for Mirror Money reveals 80% of people on Universal Credit say it doesn’t cover their essential living costs, 72% have had to borrow money and ended up in debt and 56% receive less through UC than from the old benefits system.
These shocking figures are from desperate people who have turned to PayPlan, the free debt advice firm, because of spiralling debt issues due to UC.
Payplan is trying to help an very-increasing number of people who have seen their benefits slashed from £150 to £400 a month when they are transferred onto this controversial benefit, making it impossible to make ends meet.
Rachel Duffy, chief executive of PayPlan, said: “It’s extremely sad to hear how people are so much worse off when receiving Universal Credit than when compared to their previous benefits. What’s particularly startling is almost three quarters have had to borrow money due to the new system.
“These are people who already needed debt advice from PayPlan, so this additional borrowing will mean they end up in an even worse financial situation – this combined with a low income, could have serious consequences.
“We’ve heard from those who have had to visit food banks and can’t attend medical appointments as they can’t afford travel costs.
“A real mix of people, including families, single parents and others who are unable to work as they’re carers or have health issues.”
Despite some tiny tweaks to UC, the fiasco continues leaving some of our most vulnerable suffering due to a scheme that was brought in to protect and help them through tough times.
A Department for Works and Pensions spokesperson said: “We understand the burden that debt can place on people and safeguards are in place to ensure repayments are affordable and sustainable.
“Our jobcentres can offer budgeting help and signpost people to debt support.”
‘I just want to get back to work but I’m trapped’
David John from Birmingham has struggled with debt since he was transferred onto Universal Credit. He has serious health issues and is unable to work at the moment.
Not only is he hundreds of pounds a month worse off on the new benefit, he simply can’t afford to pay his basic bills and try to repay the loan he took out to tide him over while waiting for the first UC payment to kick in – or repay an overpayment on one of his older benefits.
David, 34, explains: “Life is a complete nightmare. I just want to get back to work but I’m trapped. I have a debilitating disorder, cyclical vomiting syndrome, which is rare and more typical in children.
“It leaves me unable to do anything for days on end – sometimes eight to 10 days – as I get severe nausea and vomiting.
“And I’m struggling with financial worries and the stress of trying to repay debt that isn’t my fault, on money that isn’t enough to live on or pay even the basics.
“This is making me ill too. I can’t sleep at night from worry and I just can’t get back on my feet.”
David ended up more than £300 a month worse off when he was switched on to UC. And then he got a bombshell letter to say he’d been overpaid one of his older benefits by £1,500 and he had to pay that cash back.
David says: “That has pushed me over the edge with worry. The system is so complex and impossible to understand. How would I know I was being paid
“I am supposed to take energy food replacements to help with my illness as I have lost six stone from this condition and am malnourished and under weight. But the good brand I was recommended is too expensive so I was buying cheaper brands and that made me worse.”
David has to go for regular appointments at the hospital and often can’t afford the fares to get there.
He adds: “I keep borrowing off family and friends, which I hate. I can’t rely on them to bale me out forever. None of this is going to help me to get fit and back into work.
“I feel completely stuck. I want to train as a nurse but have had to put that on hold while doctors try and find a treatment that works for my condition. Most days I struggle to keep going and wonder how I’ll get through this.”
What you can do about it
While it there’s no silver bullet to fix the awful situation many face, there is some help available if you’re struggling.
Here are some things you could look into:
If you are struggling to make ends meet, don’t ignore things hoping they will go away – they won’t. Get help immediately. The longer you leave things the deeper in debt you will end up and you will have less options in order to sort things out.
Don’t struggle and worry alone. There is free help available. Contact your local Citizens Advice, call the National Debtline 0808 808 4000, contact StepChange Debt Charity on 0800 138 1111/via stepchange.org or PayPlan on 0800 280 2816.
Don’t be tempted to take out more credit to pay off your existing debt. Stop spending and go through your finances, so you know exactly where you stand.
Prioritise paying bills. Don’t pay the person shouting the loudest. Rent, energy and council tax should be the first on your payment list as these can have serious consequences if you don’t pay them and build up arrears. Credit cards, loans and other unsecured debt can be dealt with separately.
Make sure you are getting all the financial help you are entitled to. One of the debt charities can help you go through your individual circumstances. There’s also a useful benefits calculator at turn2us.org.uk.
Stop Universal Credit cruelty
- Universal credit could be ‘disastrous’ for disabled people
- Thousands in South Tyneside are on Universal Credit, despite worries about it plunging people into debt
- Woman whose benefits were stopped day after husband died due to Universal Credit couldn’t even afford to bury him
- Universal Credit shambles meant I couldn’t even afford to bury my husband
- The Sun launches its Make Universal Credit Work campaign to stop hard-working families being forced into poverty
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