Credit, Collections & Insolvency News
Two in five people receiving Universal Credit were forced into debt this winter as payments failed to cover soaring cost of living according to new research by the Trussell Trust.
Trussell Trust says new research has revealed the true and devastating consequences of the current cost of living crisis, with hundreds of thousands of families across the country struggling to get by.
A new online YouGov poll of people claiming Universal Credit shows two in five (40%) people receiving Universal Credit have been forced into debt this winter just to eat and pay bills. One in six people surveyed (17%) needed to visit a food bank at least once since the start of December.
One in three (33%) people receiving Universal Credit had more than one day in the last month where they didn’t eat at all or had only one meal, while one in three people (33%) surveyed have not been able to heat their home for more than four days across the last month because they couldn’t afford to.
The charity also worked with Humankind research to interview 48 people who told researchers debt forces them into a downward spiral for their finances, their family and their mental health.
People said they were unable to afford to get to work or get children to school, some said they have mould growing in their home because they can’t afford the heating, some were turning off their fridges to save money and several people highlighted an imminent risk of homelessness. Trussell Trusts says that this situation is only set to get worse, says the charity, with inflation set to hit at least 7% this April.
The UK government is due to increase benefit levels by just 3.1% – less than half what’s needed to even begin to make up the shortfall. This increase amounts to just a £2 a week rise, which the charity highlights as ‘dangerously insufficient’ in light of the soaring living costs people are facing.
Worryingly, this comes on top of the £20-a-week cut to Universal Credit introduced in November and a five-year freeze on benefits rates which means these payments are worth 11% less than they were a decade ago.
The charity is calling on the UK government to increase benefits by at least 7% this April as a bare minimum, to bring them in line with the true rate of inflation and help prevent pushing more and more people into debt with no way out.
Emma Revie, Chief Executive of the Trussell Trust, said “Right now, the cost of living is forcing hundreds of thousands of families across the country into a downward spiral of debt just to get by. People are telling us they’re going days with minimal food, are having to endure the cold to save money and are being forced to turn to food banks with devastating effects on people’s mental health. Social security should be protecting people from debt and food banks – not pushing them towards it.”
“This isn’t right. We know the situation is only set to get worse and we cannot wait any longer. That’s why we are calling on the UK Government to bring benefits in line with the forecast rate of inflation as a bare minimum in the upcoming Spring Statement, to prevent thousands more people being forced into debt and through the doors of food banks. Longer term, it is vital we strengthen our social security system so it protects us all from harm and invest in local crisis support so no one needs to use a food bank to get by.”