Universal Credit: fears that £20 cut could see many struggle to afford essentials

The forthcoming cut to Universal Credit has prompted fears that many local residents could struggle to afford essential costs this autumn.

From 6 October, the government is reducing payments by £20 a week – equivalent to £1,040 a year – after an uplift was introduced during the pandemic, which could cause problems for those who have come to rely on the extra money over the last 18 months. 

Citizens Advice Rochdale has warned that the impending cut could see many struggle to afford essential costs, especially when combined with the increase in energy costs with the colder weather, meaning that long-term debt could be a very real possibility.

Those affected could enter a problem debt spiral and remain stuck if they rely on credit cards to plug the gap and pay for household essentials, leaving them unable to afford repayments.

Problem debt disproportionately affects the most vulnerable in society, and is higher amongst low-income households, women, lone parents, communities of colour, disabled people and renters.  

The charity also fears a drop in income could be particularly difficult for new benefits claimants who may be unaware of the looming cut.

Locally, the cut is set to affect one in five people in Rochdale. According to the latest available figures, approximately 42% of Rochdale residents set to see their benefits drop are families with children and 36% are already in work. 

Staff and volunteers at Citizens Advice Rochdale have helped over 1,135 people with Universal Credit since March last year. It says the £20 a week increase has been a ‘lifeline’ and has supported people who were already struggling before the pandemic as well as those hit by Covid job losses.

Jonathan Yates at Citizens Advice Rochdale, said: “Many people seeking our advice at the moment are unaware of an impending cut to their Universal Credit. Understandably, when they realise their benefits are set to drop by £20 a week it causes a lot of anxiety.

“If you’re in this position, remember you are not alone and there is support available. As a first step, make sure you’re checking your online journal regularly so you know how much your benefits will reduce by and when. 

“Citizens Advice Rochdale, which is campaigning against the cut, is on hand to help you if you’re worried about making ends meet.”

What support is available if I’m worried about my income?

You’re not alone and there is support available. Everyone’s situation is different which is why speaking to a trained adviser may be helpful. Depending on your circumstances, support could include:

• A benefits check. This will help you verify you’re getting all the support you’re entitled to. You can use an online calculator as a starting point.
• Support with essential costs. You can contact Rochdale Council to see if they can give you any extra help from a hardship fund, including food or essential things like clothes.
• Help with debt. Some bills can cause you more problems than others if you don’t pay them. Rent or mortgage arrears, energy bills and council tax are your priority debts as there can be serious consequences if you don’t pay them. Citizens Advice Rochdale can provide guidance if you’re struggling with bills.
• Free school meals. If you have children and you get certain benefits, you might be able to get free school meals for your children. 
• Food bank vouchers. If you can’t afford the food you can ask for a referral from Citizens Advice Rochdale or an organisation that’s already supporting you - for example, a charity, school or children’s centre - for a food bank voucher.