Monday 02 August, 2021

Covid-19 leaves half of people on Universal Credit behind on bills

Thinktank cautions against withdrawing the £20 a week Universal Credit uplift in September 2021.

Almost half of long-term Universal Credit (UC) claimants had fallen behind on household bills during the Covid-19 pandemic, according to new research by an independent thinktank.

Bright Blue, the independent think tank for liberal conservatism, has today published new analysis revealing the true extent of financial difficulties experienced by people on UC during the Coronavirus outbreak.

Their report, ‘Benefit to all? Financial experience of claimants during the pandemic’, is based on data from the Understanding Society Covid-19 Study and the 2018-19 UK Household Longitudinal Study.

The report reveals that a significant minority of both existing UC and new UC households (those who made a UC claim during the pandemic) reported not being up to date with household bill payments throughout the pandemic.

The proportion of existing UC claimants who reported being behind on bills rose from 25% in 2018-19 to 38% in March 2021, rising even further to reach 46% in November 2020.

Analysis also shows that 32% of new UC claimants reported not being up to date with at least some household bills near the start of the pandemic in May 2020, before declining to a low of 17% in March 2021.

Existing UC claimants also reported that they were behind on rent or mortgage payments in November 2020, before falling to 18% in March 2021.

Similarly, 16% of new UC claimants in May 2020 and 23% in July 2020 report not being up to date with housing payments, falling to 11% in March 2021.

A significant minority said they would continue to struggle to afford household bills in the next three months – 32% of existing UC claimants and 22% of new claimants respectively.

Anvar Sarygulov, Senior Research Fellow at Bright Blue and analysis author, commented: “Even with the Government increasing financial support provided through Universal Credit in March 2020, many claimants have continued to face significant financial difficulties as the pandemic progressed.

“However, the financial situation for existing and new UC claimants has shifted throughout the pandemic, with some evidence for improvement as the pandemic progressed, especially by March 2021.

“Fully withdrawing the Universal Credit uplift in September 2021 will put an even greater number of claimants at risk of financial problems at a point when the economic recovery is only gathering pace.”

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