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This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

UC cut has wiped £440 million from 5 million households

Universal Credit

A collective £440 million will be wiped from incomes each month going forward, according to research by the Joseph Rowntree Society

Over 5.5 million families have already had their Universal Credit uplift revoked, amounting to £1,000 a year.

The top-up, introduced at the height of the pandemic, was withdrawn on October 6, however the phase out will be gradual because the benefit is paid monthly.

Research by the Joseph Rowntree Society said a collective £440 million will be wiped from incomes each month going forward.

Families will lose out on £80 a month or £1,040 a year.

The society warned it will also push half a million people into poverty, including 200,000 children.

Those in Yorkshire and the Humber, the North East, North West and West Midlands will be the worst affected, however incomes will fall nationwide.

Katie Schmuecker, deputy director of policy & partnerships at the Joseph Rowntree Foundation, said it was the biggest ever overnight cut to social security.

Families have already told how the payment reduction, coupled with the rising cost of living, will force them to choose between “heating or eating”.

Some five million households are on Universal Credit.

Under the terms of the cut, the average adult on the standard allowance will see their payments drop from £411.51 to £324.84.

This would boost the government’s coffers by around £6 billion a year.

From the beginning of August, Universal Credit claimants started to get notifications that their payments will fall from October 1.

According to official government figures, nearly 1.5 million renters across England and Wales will be affected by the cut.

According to the 2019/20 English Housing Survey, 14.4% of privately rented households in receipt of benefits were behind on rental payments.

Over the course of the pandemic, the overall proportion of privately renting households in arrears tripled.

Meera Chindooroy, deputy policy director at the National Residential Landlords Association, said: During the pandemic we have found that many renters have built high levels of arrears, which they will struggle to pay off in future.

With this in mind, the cut to Universal Credit is a short-sighted move that will only serve to worsen this ongoing rent debt crisis. Most landlords have offered flexibility where tenants have faced the financial impact of the pandemic, but they cannot absorb these losses indefinitely, she said.

She said: Practical steps to address this problem can and should be taken to ensure those tenants in receipt of benefits can cover their rents.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.