Families on UC forced into lockdown debt ‘nightmare’

New research has revealed that nearly two thirds of hard-pressed families on Universal Credit are borrowing money to stay afloat during the coronavirus pandemic.

The Joseph Rowntree Foundation and Save the Children, who released the findings, are calling for an urgent £20 a week increase to the Child Element of Universal Credit and Child Tax Credit to help keep families afloat during the emergency. It is estimated that this would support up to four million families and eight million children. It is the equivalent to £2.85 per child, per day: enough to cover a child’s breakfast and lunch or to buy books and toys so children can play and learn.

The large-scale survey of families finds six in 10 families on Universal Credit and Child Tax Credits have been forced to borrow money since start of crisis – with many relying on payday loans or credit cards. Furthermore, 70 per cent of families have had to cut back on food and other essentials, while half have fallen behind on rent or other household bills, sparking fears of more hardship ahead if unemployment rises further.

Unsurprisingly, struggling to put food on the table or money on the electricity meter is having a negative impact on parents’ mental health. In fact, two-thirds of those surveyed reported that concerns about money had affected their mental health with around a quarter reporting a severe impact.

Helen Barnard, acting director of the independent Joseph Rowntree Foundation, said: “The coronavirus crisis has shown us that as a compassionate society we want to support each other and protect each other from harm. As well as individuals performing extraordinary acts of public service, we have also seen the government intervening to protect jobs and to boost social security as a lifeline for millions of families.

“It’s vital that we build on this to ensure that the pressures on families with children in particular are recognised and acted on. Families are dealing with high costs with children at home and many simply haven’t got the income they need to weather the storm. This is taking a major toll on parents’ mental and physical health and damaging family life during an intense period for everyone.

“Providing an urgent uplift of £20 per week to families with children claiming Universal Credit or Child Tax Credits can keep many from being pulled into poverty, especially where parents have lost work as a result of the pandemic. By taking action now, we can ensure that the human suffering of this tragic pandemic is not compounded by rising child poverty, damaging life chances and holding a generation back in the years to come.”