Planned Universal Credit cut could push two million into debt

Citizens Advice has warned that the government’s planned £20-a-week cut to Universal Credit cut could push 2.3 million people into debt including almost half of claimants in ‘red wall’ battleground constituencies.

Emphasising the potential electoral risk of the cut confirmed by the Prime Minister last month, the charity’s warning found that the average budget shortfall facing claimants in areas such as Redcar and Stoke-on-Trent would be £55 a month, pushing them into debt and driving up food bank use.

Boris Johnson said in July that the end of the £20 top-up was part of a post-pandemic policy of ‘getting people into work’ but Citizens Advice said a survey of more than 2,000 claimants showed 38 per cent would be in debt after paying just their essential bills as a result, rising to 49 per cent in red wall areas.

Welfare charities estimated that up to two million Universal Credit claimants were unaware of the imminent reduction. The Joseph Rowntree Foundation has said the cut would push 500,000 people below the poverty line. Analysis by the Trades Union Congress suggested the worst affected areas would be in the south-west of England where many people were on low pay supplemented by Universal Credit.