The impending Â£ 1,000 a year reduction in universal credit could push another 800,000 people into poverty, new research shows.
A Legatum Institute study and reported by The Observer estimates that the Â£ 20 weekly increase in UC – introduced at the start of the pandemic – kept 840,000 people above the poverty line in the second quarter of 2021.
In particular, 290,000 of those people were children, raising fears of a sharp increase in child poverty once the increase was removed in October. Despite pressure from some Tory MPs, the UK government has so far refused to reconsider the cut.
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So who will feel the impact – and where can those affected find help?
When will universal credit be phased out?
The weekly Â£ 20 universal credit increase – introduced to help applicants cope with the financial impact of the pandemic – is expected to be reduced from October 6.
However, the exact date that affects applicants will depend on their payment date. The cup will start between October 13 and November 12.
How many people are affected by the reduction in Universal Credit?
There are six million people in the UK on universal credit, all of their incomes will drop as a result of the cut.
To make matters worse, the Resolution Foundation estimates that 1.7 million homes will see their energy bills increase by Â£ 153 a year – from the same month the UC cut goes into effect.
The think tank says that of the 4.4 million UK households with universal credit, 40% use prepaid energy meters, compared to 10% of households that do not receive any state benefits.
Where can I get help with Universal Credit?
If you experience financial difficulties after the Universal Credit Cut takes effect, help and advice is available.
You may be able to get a budget advance to help with some emergency household expenses, as well as other aids including cold weather payments, discretionary housing payments (if your UC does not cover your rent), and grants for people with disabilities.
If you need advice on managing your money, you can get it from organizations like Money Advice Trust, Turn2Us, and Citizens Advice Bureau.
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