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Universal credit will pay barely half of acceptable standard

Universal credit

The news comes as a group of 50 backbench Conservatives said they opposed the government’s planned September universal credit cut of £20 per week

The looming cut to universal credit will leave families on less than half of an acceptable standard income, a leading think tank has declared in a new report as more Conservative MPs come out against the government’s intention to cut the benefit by £20 per week.

As first reported in the Mirror, the Joseph Rowntree Foundation says the minimum income standard should be £482 a week for a working-age couple with two young children.

But such families on universal credit from October are set to receive just 55 per cent of that, or £266, the think tank estimates.

The MIS is defined as a benchmark for what people need to achieve a “minimum socially-acceptable standard of living in the UK”.

This year’s MIS has been set at £213 a week for single working-age adults, £356 for working-age couples without children, and £389 for single parents with two children aged three and seven. The budgets exclude rent or mortgage, childcare and council tax.

The news comes as a group of 50 backbench Conservatives said they opposed the government’s planned September universal credit cut of £20 per week.

The northern research group said an 18-month £20 uplift due to Covid had been a life-saver for many, adding: Keeping the uplift is not a zero-sum game for the government. Many people on universal credit are in work or want to be in work and we shouldn’t pull the rug out from under their feet.

The £20 per week uplift was added to top up universal credit payments from the start of the coronavirus pandemic. That uplift was due to end in March, but the government caved in to pressure from opposition parties, backbench MPs, and campaigners, extending it by six months. It is now due to end in September, meaning anyone on universal credit will be around £1,000 a year worse off, despite the cost of living continuing to rise.

The shadow work and pensions secretary, Jonathan Reynolds, said the looming Universal Credit cut is morally and economically wrong.

The Labour MP said: Under this government millions of children are already living in poverty; this cut will only make things harder. It is time the government saw sense, backed struggling families and cancelled their cut to universal credit. Labour would replace universal credit with a fairer social security system.

The Liberal Democrats have said the government “should commit to extending the uplift and give households the security they need”. The Scottish National Party has said the removal of the £20 uplift will be a callous act.

Just last week, six former Conservative work and pensions secretaries called on the government to cancel the cut.

As the economy reopens, and the government re-evaluates where it has been spending money, we ask that the current funding for individuals in the universal credit envelope be kept at the current level, the group, comprising Iain Duncan Smith, Damian Green, Stephen Crabb, David Gauke, Esther McVey, and Amber Rudd, wrote.

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.