More than half of Universal Credit claimants surveyed have faced hardship waiting for their first benefits payment
Advisers say some people take drastic steps to “scrape by” because they are scared to take out an advance
New research from Citizens Advice has found that out of 500 people surveyed who have applied for Universal Credit as a result of the coronavirus outbreak, more than half (53%) have faced hardship during the five-week wait for their first payment.
The charity, which is presenting evidence on the five-week wait at today’s Work and Pensions Committee, has supported almost 90,000 people with Universal Credit issues since the lockdown began.
Today (10 June) is the final day employers can sign up their employees for the Job Retention Scheme. Citizens Advice is calling for urgent changes to the five-week wait given the potential for a new surge in claims as the furlough scheme unwinds.
Research from Citizens Advice shows one in seven surveyed (14%) who’ve applied for Universal Credit since the lockdown haven’t been able to afford essentials like food and heating while waiting for their first payment. Further to this, one in five (19%) have borrowed money from family and friends.
Cases seen by the charity’s frontline advisers include people who have had to skip meals, rely on hot water bottles for warmth, and sell personal possessions for income during the five-week wait.
Nearly three million people have made a claim for Universal Credit since mid-March and over a million advance payments have been provided. However, insights from frontline advisers at Citizens Advice suggest some are “scraping by” because they are scared of having to repay an advance.
Citizens Advice warns further measures to shore up Universal Credit are needed as redundancies increase and people who have been ineligible for the government’s support schemes run down their savings and seek support from the benefits system.
Dame Gillian Guy, Chief Executive of Citizens Advice, said:
“Universal Credit has been a hugely important safety net during this crisis, but it’s simply not right that some end up skipping meals, borrowing from family members or falling behind on bills while they wait for money to come through.
“The government has said that it is too complicated to change the payment process for Universal Credit. Yet tackling this technical challenge is needed to reduce the human cost of the five-week wait.
“With the close of the Job Retention Scheme, it’s more urgent than ever that the government build on its measures by temporarily turning advance payments into a grant.”
Sam Williams, Welfare Benefits Specialist at Citizens Advice Warrington, says:
“The five-week wait is a real shock for people navigating the benefits system for the first time. You can sense them trying to do the mental maths on whether they can get by until their first payment and even then, if it will be enough for their essential bills and for them to put food on the table for their kids.
“We talk people through their options, but taking an advance is something many feel nervous about. Instead I’ve seen people literally scraping by until their first payment: asking family and considering credit cards or other forms of credit from lenders; missing bills; and relying on food banks for support. It can put an enormous strain on people both financially and emotionally.”
Frontline adviser insights:
Nasar* asked Citizens Advice for help applying for Universal Credit, after losing his job during the lockdown. He had been working in the hospitality industry and was paying off debt via an Individual Voluntary Arrangement, which is a formal solution to pay back debts over a period of time. Although he struggled to afford food and needed a food bank voucher, he did not want to take out an advance payment because it would involve getting into further debt.
Ania and Shane* applied for Universal Credit after Shane was left without a job due to coronavirus. Due to discrepancies over when Shane had been paid his final wage, they didn’t receive any money for their first Universal Credit payment. Despite this the couple only took half of the advance payment that was available to them in order to cover essential bills for the five-week wait, because they did not want to take on too much debt.
Notes to editors
1. Survey of 2,009 18+ nationally representative UK adults conducted on behalf of Citizens Advice by Opinium (carried out between 13-19 May). This includes a boosted sample of 500 people who have claimed Universal Credit ‘as a result of the coronavirus outbreak’ (carried out between 14th-22nd May).
2. “Hardship” determined as people who ticked “yes” to any of the following in response to the question: “You mentioned you have applied for Universal Credit as a result of the coronavirus outbreak. How did you/are you coping financially with the wait for your first payment?”: “I have borrowed money from family and/or friends”, “I have borrowed money from banks or commercial lenders”, “I haven’t been/wasn’t able to afford essentials”, “I haven’t been/wasn’t able to pay my rent or mortgage”, “I haven’t been/wasn’t able to pay my bills.”
3. Citizens Advice has supported almost 90,000 people with Universal Credit issues since the lockdown began, this includes through its Help to Claim service
4. Between 16th March – 2nd June, 2,976,140 million people made a claim for Universal Credit and 1,143,960 advance payments were provided. See Department for Work and Pensions, Universal Credit declarations (claims) and advances: management information.
5. Previous research by Citizens Advice shows the shortfall in people’s budgets caused by deductions to repay advances as people’s Universal Credit claim continues can create severe financial challenges and have knock-on effects, such as pushing people to cut back on essentials, sell personal possessions or take on further debts. See Citizens Advice (2019) Managing Money on Universal Credit
6. People with savings over £16,000 are not eligible for Universal Credit. This applies in situations where the individual or their partner has this amount in savings.
7. To get advice online or find your local Citizens Advice, visit citizensadvice.org.uk
8. For consumer advice, call the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 to talk in Welsh.
9. We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
10. Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.