Universal Credit Cut Come As a Shock to Claimants

The government has been accused of failing to explain the £20 universal credit cut, with many families uninformed of the impending cut.

After it was revealed that up to two million claimants were unaware of the impending £20-a-week cut in universal credit payments, Labour has accused the government of failing to prepare struggling low-income families for the October drop.


The Guardian:  According to other polls conducted by organisations fighting poverty, between 18% and 36% of claimants were unaware that their income will be cut by £90 per month or £1,050 per year after September – the largest decrease in social security benefits since WWII.

Campaigners are concerned that the public is unaware of the impending cut, which is only six weeks away. For many, it will be a huge financial shock, one that will strike homes once the furlough ends and large hikes in energy prices take effect.

Frontline advisers have reported “huge worries” among the claimnats about how they would survive without the extra £20 per week, according to Citizens Advice.

According to Save the Children, more than three million children living in low-income homes are expected to be affected by the cut, with half of claimants stating that they will suffer financially starting in October.

According to the Joseph Rowntree Foundation, the reduction would force 500,000 people into poverty.

“It is disgraceful that the government has not adequately communicated with individuals in receipt of universal credit ahead of the largest overnight reduction to social security in decades, affecting millions of people,” said Jonathan Reynolds, the shadow work and pensions minister.

“It’s terrible enough that this catastrophic reduction is being imposed, but failing to prepare families for it adds insult to injury.” Perhaps the government is simply too embarrassed to take responsibility for its conduct. It’s not too late for the prime minister to see the light, reverse his decision, and support struggling families.”

Backbencher Conservative MPs are also unhappy about the cut, which comes amid fears of a worsening cost-of-living problem in southern Tory heartlands and “red wall” parts of England’s north and the Midlands.

In the United Kingdom, around six million individuals get universal credit, the bulk of whom began claiming after losing their jobs or working hours due to the pandemic. Many people will not have applied for the benefit until April 2020, when a temporary £20 weekly increase was implemented.

In a poll of 4,000 people conducted by the charity Turn2us between August 6 and 13, 36% indicated they were unaware of the £20 decrease. Lack of awareness was highest among 18- to 24-year-olds (52%), and Greater London was the place to go (43%).

“We are just weeks away from the biggest cut to our social security system since World War II,” Jo Kerr, director of impact and innovation at Turn2us, said. “Many people who will be affected do not even know it’s coming.”

The Trussell Trust discovered that 18% of the 2,000 universal credit recipients questioned between August 5 and 19 were unaware of the reduction. Trussell’s head of policy, Garry Lemon, said it was frightening that the cut was approaching quickly and that many people were unprepared.

“I recently advised a woman on how she might make ends meet,” Gayle Purves, an adviser for Citizens Advice Newcastle said. She has an 18-year-old handicapped kid, which means her payments are already being reduced. “She was completely unaware of the slash. It was another setback in what had already been an unbelievably trying year.”

Ministers announced the decrease in early July, but instead of sending a formal letter to each of the UK’s 6 million universal credit users, they are relying on a series of notifications to claimants’ online journals, accompanied by SMS alerts.

“We made adjustments to all statements in July and are presently following up with text messages to remind claimants to check their accounts,” a spokesman for the Department of Work and Pensions said. “In September and October, more notices will be delivered.”

On 20 August 2021, this information was updated to clarify that the claimants’ incomes will be reduced by £90 per month rather than £90 per week.

(Reuters) – Problems in supply chains, a spike in prices, and the danger of a surge in unemployment have hindered Britain’s economic recovery following the coronavirus lockdowns, complicating policymakers’ task of managing the recovery.

Andy Haldane, a former Bank of England top economist, believes the UK is in a VILE age of low growth and unpredictable inflation.

Markets currently believe the Bank of England will raise interest rates by February, but other economists, concerned by evidence of a slowing recovery, are not so confident.

The following are some of the economic indicators that are likely to be on the minds of policymakers in the United Kingdom.


Reuters: In August, the UK’s inflation rate reached 3.2%, the highest in over a decade. The record increase from July was due to a few one-time events, but the Bank of England believes inflation will rise above 4%, more than double its objective of 2%.

The Bank of England is looking for indicators that consumers are losing faith in the ability of the government to keep inflation under control in the long run.

According to a Citi/YouGov survey, public expectations for inflation in the coming year climbed considerably in September, which may have weighed on the minds of BoE rate-setters. Last month, they stated that the argument for hiking rates was becoming stronger.

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