In the UK, a staggering 6.1 million people find themselves caught in a harsh reality that Universal Credit isn’t enough to live on. In fact it falls short by 20%.
Imagine being on your own, without a job, and relying on Universal Credit to make ends meet. The stark reality is that you’ll only receive a mere £84.80 per week.
This falls significantly short of covering even the most basic necessities, such as putting food on the table and maintaining a warm home on cold days. To break even, you need £104 a week. That’s a substantial 20% shortfall, and its impact is palpable in every financial decision you make.
This isn’t a new problem; it predates the benefit cuts implemented in 2013. Even before these cuts, a single person needed almost three-quarters of their benefits just for food and energy costs. Fast forward a decade, and this figure has surged to over 120%.
This predicament can happen to anyone. It revolves around real people who work hard, face job losses, and turn to Universal Credit for a bit of support. However, the reality is disheartening as the support falls short of what is necessary to live.
Could this be a solution?
There is something that could be done though. The government made significant adjustments for pensioners, ensuring their income increased with earnings. The state pension and Pension Credit rose in tandem with improving earnings, resulting in a guaranteed weekly amount of £201.05 for a single pensioner – a stark contrast to the £84.80 offered under Universal Credit.
Recent changes to Universal Credit made a difference. A temporary £20 increase per week in the standard allowance was introduced due to the coronavirus pandemic, providing relief from March 2020 to September 2021. Subsequently, in November 2021, work allowances increased by £500 per year, and the taper rate decreased from 63% to 55%.
While the £20 increase had a more noticeable impact in reducing absolute poverty, benefiting those without work, the changes in work allowances and the taper rate predominantly favored households with higher earnings. The £20 increase, costing around £6 billion annually, overshadowed the £3 billion cost of the taper rate reduction.
It’s just not enough
Universal Credit, in its current state, fails to serve as a safety net. People require more than the basics; they need the means to live a life that extends beyond mere survival. It’s about creating a system that allows people to live decently. Let’s remain hopeful for changes that will paint a brighter picture for those grappling with these hardships every day.
