Citizens Advice is warning that the expansion of Universal Credit is 'a disaster waiting to happen', as new findings show it is pushing people further into debt.
The charity says that the government’s plans to accelerate roll-out of the benefit from five to 50 areas a month from October could have catastrophic consequences, as there are still many problems with the system including the long wait for first payment.
Citizens Advice analysed over 50,000 cases where it has helped people with their debt problems and found that for those on Universal Credit:
79% have priority debts such a rent or council tax, putting them at greater risk of eviction, visits from bailiffs, being cut off from energy supplies and even prison - compared to (69%) on legacy benefits such as Jobseekers Allowance or Housing Benefit.
2 in 5 (41%) have no money available to pay creditors as their monthly spend on essential living costs is more than their income.
Typically people on Universal Credit only have around £3 a month left to pay creditors.
Citizens Advice is today urging the government to ensure no one applying for Universal Credit waits longer than 6 weeks for an income, and that anyone who needs it gets a payment within 2 weeks that they do not need to repay.
The charity is also renewing its call for the roll-out of Universal Credit to be paused until problems with the benefit are fixed and for the government to ensure support is in place to help people adapt as they move onto the new benefit.
Citizens Advice Chief Executive, Gillian Guy, said:
“The roll-out of Universal Credit is a disaster waiting to happen.
“While the principles behind Universal Credit are sound, our evidence shows that if the government continues to take this stubborn approach to the expansion of Universal Credit, it risks pushing thousands of families into a spiral of debt, and placing an even greater strain on public services.
“People face severe consequences - like visits from bailiffs and eviction - when they can't pay their bills. But government can help protect these households by taking the simple step of pausing Universal Credit and fixing the underlying problems, so families are less likely to fall into arrears. The government should also ensure that everyone has access to the support they need to adapt to Universal Credit”