Debt
“My fridge is broken and I can’t afford to get a new one so I have to buy as I go which is more expensive. UC’s answer is to borrow more money. If I borrow any more money my head is going to explode.”
“I’d never been in debt in my life before Universal Credit.”
“I took an advance of £1,200. And then I received a letter saying that I had an overpayment from tax credits… then they came with anther note… There’s nearly £6,000 of debt from the space of December to January, moving onto Universal Credit ”
Universal Credit causes people to fall into debt, sometimes for the first time. This is because of the five week (and often longer) wait for a first payment. It is also because new claimants often find they are having deductions taken from their payments (for example, for previous benefit overpayments or housing arrears). This leaves even less money to manage on, and so often leads to debt. Debt causes stress and anxiety for affected individuals, and often has a negative impact on mental health.
Find out about what financial support is out there for you, in our Universal Credit Guide.