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'Universal Credit has been a nightmare...I had to take out a loan to pay my bills' says Cambridge mum, 18

People being moved onto the government’s flagship Universal Credit benefits programme are left spiralling into debt by a system that leaves the “most vulnerable people even more vulnerable”.

Universal Credit has faced persistent criticism that its complexity and, in particular, delays to initial payments, have caused many people making new claims or moving from other benefits to go into debt, with some needing to use food banks.

The government has admitted that the roll out has contributed to an increase in food bank use, with a minimum of five weeks before an initial payment and a system prone to errors.

Universal credit (8020636)
Universal credit (8020636)

In Cambridge, one organisation says it has made three times the number of food bank applications since the system was rolled out in October than it did during the previous 12 months.

Claimants have told the Cambridge Independent about the turmoil of living through a time of huge change.

For single mum Louise, who is studying with the Open University for a graphic design degree, benefit overpayments when she moved Universal Credit have fuelled a cycle of debt. The 18-year-old was moved onto Universal Credit in November last year and says it has driven her further into financial hardship.

The teenager gave birth to her daughter in May just weeks after finishing college and moved to Universal Credit following the breakdown of her relationship.

“For the first six weeks I had no payments into my account. I had to take a loan from Universal Credit of £500 to pay my bills, which I pay £41 back a month, and I had a lot of help from my family. It’s not the best system,” she said.

Louise receives £1,090 a month, of which £650 goes on rent while the remainder is used for gas, electric, water, nappies, formula, wipes and food.

“It leaves you with very little each month. The other day I received a tax credit overpayment of £295 so I have to pay that back now too. I don’t know how they expect you to survive on the amount that you’re given,” she said.

This latest overpayment follows one for housing benefit, which already costs the mum £22 per month.

She explained: “It was a nightmare. I’ve just been paying a housing benefit overpayment of £22 and I don’t know where that came from either. There’s just constant bills and overpayments just coming out of nowhere.”

Latest figures show there were 854 Universal Credit claimants in Cambridge in January and 464 in South Cambridgeshire. The majority of the claimants in both areas are single people without children while 37 per cent of those claiming in Cambridge are in employment.

Judith Cork is outreach and engagement worker on Romsey Mill’s young parents programme, which offers a range of practical advice and supports for many teenage mums and young parents from Cambridge and South Cambs. This include benefits, accessing housing and groups offering practical parenting advice, returning into training or work and establishing support networks.

She has helped six families to apply for Universal Credit, which is a digital-by-default benefit.

“For anybody to be able to access it you have to have access to the internet,” Judith explained.

“Lots of the families have data on their phones but trying to complete that kind of form on a phone screen, is somewhat of a challenge. So there’s a double whammy.”

While acknowledging the reasons behind the checks, Judith admits it can be tricky for first-time applicants.

“It’s not complicated stuff that it’s asking, but it can take time and sometimes the families I work with just aren’t that confident with that kind of thing.”

The Department of Work and Pensions’ (DWP) own survey data suggests 46 per cent of people claiming Universal Credit need help applying online. The same data shows that a quarter of applicants who fail to submit their claims online put it down to difficulties accessing computers or the internet.

“The fact that you have to do it online, it does expect that you have a level of IT knowledge and literacy skills,” Judith said.

“If anything goes wrong with your claim all of your money stops apart from child benefit, it’s all the income somebody has and it just ceases.

“They don’t get that backdated. They just have nothing for five weeks. It’s not like they were getting masses of money in the first place, so they’re not able to save up lots of money for this kind of situation.

“The only thing that they are offered is the DWP can give you an advance, but that then means that once their Universal Credit claim is approved they then have to pay that money back. So the not-masses of money they get for their Universal Credit is then reduced even further because they are having to pay the loan back.”

South Cambridgeshire MP Heidi Allen – who recently left the Tories to join the Independent Group – has been a critic of the government’s handling of the scheme and sat on the expert steering group which looked at how claimants’ experience.

She has called on ministers to restore funding and make the five-week wait more manageable.

Ms Allen, vice-chair of the work and pensions select committee, said: “The unpalatable truth is that our welfare safety net is no longer holding up those most vulnerable in society. It’s tangling around their feet and dragging them into the water.”

This week, the MP continued her anti-austerity tour of the UK with committee chair Frank Field MP.

Last month, Amber Rudd, work and pensions secretary, admitted that benefit payment delays could have led to increase in food bank use.

And that picture is reflected in Cambridge.

Judith said: “I’ve done more food bank applications in the past three months than I had done in the previous year. I’ve definitely seen an increase in that. All the adverts say get a bank account, get online, get budgeting – that seems to be the line that comes with regards to Universal Credit, which can be challenge.

“It’s fair enough that we are encouraging people to budget, but actually if you’ve only got a limited amount of money it will only stretch so far. It’s tough for the people that are dealing with this. People who want to do really well and want to be able to budget and sort it out, but actually if from the very word go and you’re starting to get Universal Credit, you’re already in debt because of having to wait. That seems particularly unhelpful.

“I get some of the point behind it, but it is then not that straightforward for those people who for whatever reason, life might be more of a challenge. And just remembering to be on top of it is potentially setting them up to fail.”

Universal Credit is yet to affect everyone who claims benefits in the city and South Cambs. It will initially replace the jobseeker’s allowance, employment and support allowance, child and working tax credits, housing benefit and income support in all new claims from people under the state pension age.

If you are already receiving one of these benefits, you might not have to claim Universal Credit for some time unless your circumstances change.

But, as Louise recommends, if you are yet to move to Universal Credit then it is best to get saving now.

“I think that when you move from tax credits to Universal Credit before you do that or they make you move, you need to build up some savings to live off especially if you don’t have family to support you like I did. You definitely need to save at least £500 to get you through those six weeks when you have no money at all.

“All I received was £82 child benefit for those six weeks. I don’t know how they expect you to pay your bills on that. It’s just a bad system for swapping you over.”

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