Universal Credit cut: Everything you need to know

young familyOver the coming weeks, people claiming Universal Credit will receive notifications about a cut to their benefits this autumn. Benefits experts at Citizens Advice, which is campaigning against the cut, set out what this means for claimants.

When will the cut happen?

As it stands, the government is set to slash benefits by £20 a week - equivalent to £1,040 a year - from 6 October. The exact date people will see the cut kick in will depend on the day they get their Universal Credit payment. For many, this means September will be the last month they see their benefits paid at existing levels.

How many people will be affected?

If plans go ahead, the cut will hit nearly six million people on Universal Credit. More than a third (38%) of those who’ll see their income hit are already in employment, while one in six (16%) are under 25. Latest figures show roughly 1.9 million families with children will see their benefits cut.

How much could I lose?

While every Universal Credit claim will drop by around £85 a month, the proportion of income claimants will lose will vary depending on their circumstances. Single people under 25 are set to be hit by the biggest drop.

Monthly standard allowances will drop:

  • By a quarter for single claimants under 25, from £344 to £257.33

  • By a fifth for single claimants over 25, from £411.51 to £324.84 

  • By 17% for joint claimants under 25, from £490.60 to £403.93 

  • By 14% for joint claimants over 25, from £596.58 to £509.91

Previous analysis by Citizens Advice shows £20 a week is equivalent to six days of energy costs or three days of food costs for a low-income family. 

What support is available if I’m worried about my income?

You’re not alone and there is support available. Everyone’s situation is different so it’s important to seek independent help from somewhere like Citizens Advice. Depending on your circumstances, this could include:

  • A benefits check. This will help you verify you’re getting all the support you’re entitled to. You can use an online calculator or contact your local Citizens Advice.

  • Support with essential costs. You can contact your local council to see if they can give you any extra help from a hardship fund, including food or essential things like clothes. Check your local council on GOV.UK.

  • Help with debt. Some bills can cause you more problems than others if you don’t pay them. Rent or mortgage arrears, energy bills and council tax are your priority debts as there can be serious consequences if you don’t pay them. Citizens Advice can provide guidance if you’re struggling with bills.

  • Free school meals. If you have children and you get certain benefits, you might be able to get free school meals for your children.  

  • Food bank vouchers. If you can’t afford the food you can ask for a referral from Citizens Advice or an organisation that’s already supporting you - for example, a charity, school or children’s centre - for a food bank voucher.

Kate Green, Senior Benefits Expert at Citizens Advice, said:

“Many people seeking our advice at the moment are unaware of an impending cut to their Universal Credit. Understandably, when they realise their benefits are set to drop by £20 a week it causes a lot of anxiety.

“If you’re in this position, remember you are not alone and there is support available. As a first step, make sure you’re checking your online journal regularly so you know how much your benefits will reduce by and when. 

“Citizens Advice is on hand to help you understand what the cut means and what you can do if you’re worried about making ends meet.”

 

Need advice?

  • To speak to an adviser over the phone Call freephone 0800 144 88 48. Lines are open Monday to Friday, 9am to 5pm

Published: 12 August 2021. Updated 24 August 2021.

Notes 

  1. Latest DWP figures show 5,966,262 people are claiming Universal Credit
  2. The most recent available data shows 1,916,818 families with children are claiming Universal Credit.
  3. The Universal Credit uplift is equivalent to £86.67 per assessment period (month) or £1040.04 per year.
  4. Citizens Advice analysis of the Living Costs and Food Survey (2018-19). We estimated the number of days of energy that £20 would cover for households in the bottom half of the equivalised income distribution.
  5. Citizens Advice includes the national charity; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
  6. Citizens Advice’s services are free, independent, confidential and impartial, and available to all regardless of race, gender, disability, sexual orientation, religion, age or nationality.
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