Half of people on Universal Credit struggle to pay the rent, says Citizens Advice

PEOPLE claiming Universal Credit are struggling to pay for the roof over their heads while they wait for their first payment, according to Citizens Advice.

The Government has reduced the waiting time for claimants from six weeks to five; even so they continue to struggle to meet their housing costs, the organisation has found.

In a new report, Managing Money on Universal Credit, released today, the charity has presented new analysis based on the 190,000 people Citizens Advice has helped with Universal Credit.

According to the report, one in two people Citizens Advice helped were in rent arrears or fell behind on their mortgage while waiting for their first payment; the same number as when the waiting time was longer. Furthermore, it found that 60% of the people it helped are taking out advances while they wait for payment.

However, the research also found that, following changes by Government in 2017, fewer people are falling behind on their bills or going without essentials during the wait period. Payment timeliness has improved — now one in six people are not paid in full and on time, while previously it was one in four.

“Half the people we help with a Universal Credit claim are still struggling to keep a roof over their heads while they wait for their first payment,” said Gillian Guy, chief executive of Citizens Advice.

“Changes to the waiting period for first payment have improved things for many people, but our evidence shows they don’t go far enough. Universal Credit must continue to be reformed so it works for all claimants and leaves people with enough money to live on.”

Among the people the charity helps with debt and Universal Credit, Citizens Advice found:

  • Debt problems are more common for the people it helps with Universal Credit than those claiming benefits under the previous system, with 24% of the people helped with Universal Credit also seeking debt advice
  • Nearly one in two (47%) have no money left after essential living costs (such as food, housing and transport) to pay creditors, or are spending more than they take in
  • More than four in five (82%) hold priority debt such as council tax, rent arrears or mortgage payments, and energy debts

Faced with these findings, Citizens Advice is calling on the Government to make Universal Credit far more flexible to fit around people’s lives and to make sure people have enough money to live on.

It also wants Alternative Payment Arrangements to be more widely available, allowing for rent to be paid direct to a landlord, more frequent payments, and a payment to go to both members of a couple.

Just 3% of claimants currently receive more frequent payments, the organisation said, while just 20 households in the UK receive split payments to different family members.

Four in 10 of the people helped by Citizens Advice are aware of managed payments to landlords, while just one in six know payments can be made more frequently.

The report is further evidence that people on Universal Credit are “struggling to pay their rent” said the Local Government Association (LGA), which represents councils in England and Wales.

“The Government was right to have announced measures in the Budget to partly address this, but it is vital that they work closely with councils to make sure that they are as effective as possible,” said Councillor Richard Watts, chair of the LGA’s resources board.

“The ability of councils to provide extra support to people to keep rent arrears down is becoming increasingly limited and we also remain concerned about the Government’s significant reductions in Housing Benefit, which can leave people struggling to pay their rent.

“Councils want to work with the Government and partners, including Citizens Advice, to ensure that the design and implementation of housing support, welfare reform and Universal Credit works for people.”

NH

 

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