Two thirds of families on Universal Credit being forced to loan sharks or borrow money during pandemic

NEARLY two thirds of hard-up families on Universal Credit are being forced to loan sharks or borrow money from others to stay afloat during the coronavirus crisis, shocking research has revealed.

Save the Children and the Joseph Rowntree Foundation found that half of those surveyed were behind on their rent or other bills after finding their incomes squeezed during the pandemic.

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And 60 per cent of families on Universal Credit or Child Tax Credit have been forced to borrow money including using payday loans or credit cards, pushing them further into debt, it found.

Seven in ten families have had to cut back on food and other essentials, the research by Opinium found, and two thirds said money worries were affecting their mental health.

The charities are demanding the Government give them a vital lifeline of an extra £20 a week increase in child benefit and child tax credit to help minimise the impact on the nation’s kids.

They said this would be enough to help four million families afloat and provide direct support for eight million children.

Millions of Brits on Universal Credit have had a £1000 a week oost to their income thanks to the virus pandemic.

But those on older legacy benefits haven't had the same help.

Julie Hutchings, 34, who is a single mum to two boys, says her bills have been rising thanks to the coronavirus crisis – and she's had to get her parents to help her with food shopping.

She told The Sun: "I've been spending more on the electric and gas – cooking at home, charging the phone more. And the TV is on all the time.

"I find that some of the shopping seems to be a bit dearer too.

"Things are tight at the moment.

"£20 extra a week, something like that would be very helpful."

Barbara and her husband Harry, who have one daughter and care full-time for their 11-year-old grandson, started receiving Universal Credit after Harry fell ill with Coronavirus and was unable to work.

“Financially, it’s just a nightmare," Barbara said. After the bills are paid and you’ve got the food in, there’s just no money left. There’s just no money,” Barbara said.

“You’re getting people calling and asking why your bills haven’t been paid, and you just don’t have the money. It’s stressful when you’ve gone years and years always paying your bills, and then all of a sudden you can’t pay them.

“It’s the children that suffer. There are certain basics that children need, and if they need a new pair of shoes or something it means taking out a loan – and then you’re getting deeper into debt.”


Helen Barnard, Acting Director of the independent Joseph Rowntree Foundation said: "Providing an urgent uplift of £20 per week to families with children claiming Universal Credit or Child Tax Credits can keep many from being pulled into poverty, especially where parents have lost work as a result of the pandemic.

“By taking action now, we can ensure that the human suffering of this tragic pandemic is not compounded by rising child poverty, damaging life chances and holding a generation back in the years to come.”

And Dan Paskins, Director of UK Impact at Save the Children, added: “Life at the moment is especially hard for families forced to make impossible choices about whether to put food on the table or money in the electricity meter.


"A £20 a week increase will give families with children the lifeline they need to pull them through these difficult times."

Figures revealed yesterday showed 600,000 jobs had been lost since the virus pandemic began.

Economists and the Treasury are concerned that three million in total may be lost in the months to come, pushing up the number of people forced to claim benefits.

A DWP Spokesperson said: "This Government understands the challenges many are facing which is why we injected £6.5bn into the welfare system, including increasing Universal Credit and Working Tax Credit by up to £1,040 a year, as well as rolling out income protection schemes, mortgage holidays and additional support for renters.

“With Universal Credit no one has to wait five weeks for money as urgent payments are available and more than one million have been made – landing in bank accounts within days of a request – since mid-March.”


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