Some 50% of universal credit claimants the charity helped were falling behind on their mortgage payments or in rent arrears – the same number as before the reforms took effect, separate research by Citizens Advice found.
People claiming Universal Credit are still struggling to pay for the roof over their heads, despite the wait for their first payment being reduced from six weeks to five, Citizens Advice data has found.
Some 50% of universal credit claimants the charity helped were falling behind on their mortgage payments or in rent arrears – the same number as before the reforms took effect. And 60% of people it helped are taking out advances while they wait for payment.
Gillian Guy, chief executive of Citizens Advice, said: “Half the people we help with a Universal Credit claim are still struggling to keep a roof over their heads while they wait for their first payment.
“Changes to the waiting period for first payment have improved things for many people, but our evidence shows they don’t go far enough.
“Universal Credit must continue to be reformed so it works for all claimants and leaves people with enough money to live on.”
The research also found that, following changes by government in 2017, fewer people are falling behind on their bills or going without essentials during the wait period. Payment timeliness has improved though it’s still worse than it should be – now one in six people are not paid in full and on time, while previously it was one in four.
The report, Managing Money on Universal Credit, released today, revealed an analysis based on the 190,000 people Citizens Advice has helped with Universal Credit.
Citizens Advice is calling on the government to make Universal Credit far more flexible to fit around people’s lives and to make sure people have enough money to live on.
It also wants Alternative Payment Arrangements to be more widely available, allowing for rent to be paid direct to a landlord, more frequent payments, and a payment to go to both members of a couple.
Just 3% of claimants currently receive more frequent payments, while just 20 households in the UK receive split payments to different family members.
Some four in 10 of the people helped by Citizens Advice are aware of managed payments to landlords, while just one in six know payments can be made more frequently.
The Residential Landlords Association (RLA) found that of those landlords with tenants on Universal Credit, 61% experienced them going into rent arrears in the past 12 months, up from 38% last year and 27% in 2016.
Chris Town, vice chair of the RLA, added: “Today’s report demonstrates the need for more changes to be made to Universal Credit.
“One of the main drivers of rent arrears has been that tenants cannot routinely choose to have the housing element of Universal Credit paid directly to their landlord at the start of a claim.
“Many tenants prefer to have the assurance that their rent is paid and their right to do this should be introduced immediately.
“This needs to be coupled with lifting the freeze on housing benefits and the housing element of Universal Credit. Housing cost support is simply not keeping up with the realities of rents in the private sector, despite them falling in real terms over the past year.”
Debt problems are more common for the people we help with Universal Credit than those claiming benefits under the previous system, with 24% of the people Citizen Advice helped with Universal Credit also seeking debt advice.
Nearly one in two (47%) have no money left after essential living costs, such as food, housing and transport, to pay creditors, or are spending more than they take in.
More than four in five (82%) hold priority debt such as council tax, rent arrears or mortgage payments, and energy debts.