Benefit claimants hit by a ‘perfect storm’ during cost of living crisis

The last few years have been extremely tough for low-income households.

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People in Scotland who are claiming Universal Credit (UC) are being hit by a ‘perfect storm’ during the cost of living crisis, according to a new report published today by Citizens Advice Scotland (CAS).

The last few years have been extremely tough for low-income households, the report argues.

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CAS says the pandemic left 1.8 million people in Scotland financially worse off, and even before the most recent increase in the energy price cap one in three people found their bills unaffordable.

Now these people are facing soaring prices and flat or falling incomes, which CAS warns could plunge tens of thousands of more people across the country into poverty, problem debt, and destitution.

Those relying on the social security system are particularly vulnerable to poverty, the report argues.

According to CAS, over 447,500 people across Scotland are on Universal Credit – equivalent to more than one in ten working age adults in Scotland and almost double the number before the pandemic.

The charity says it has seen a significant increase in the number of people in Scotland who are reaching out to its network for advice and support:

  • Advice need for food banks has grown by almost a third (31%) since September 2021.
  • Advice need for other charitable support, including fuel bank referrals, saw a sharp increase of 23% between September 2021 and December 2021, likely reflecting the additional pressure of winter heating bills.
  • Advice on Universal Credit sanctions has grown by 53% over 2021-22.
  • Advice on Universal Credit Budgeting Advances has risen by 25% over 2021-22.
  • Advice on Universal Credit overpayments nearly doubled from the average across 2020/21 to Q4 of 2021/22.

CAS Social Justice spokesperson David Scott says, “Everybody is feeling the squeeze at the moment, with high fuel bills and other inflationary costs, while incomes stagnate.

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“But those who rely on support from Universal Credit are amongst the most vulnerable, and that’s why we wanted to focus on them in this report.

“We reported in early 2021 that many people on UC were already cutting back on food, utilities, and other essentials to make ends meet.

“When the UK Government then cut UC by £20-per-week in October last year, just as energy and food prices began to skyrocket, we warned this would create a perfect storm for these households.

“The research we are publishing today shows just how true that has been. Every CAB in Scotland is reporting to us that they are seeing UC claimants who just can’t make ends meet.

“With food prices still rising and the energy price cap set to increase again in October, the cost of living crisis will be with us for many more months. But for those who fall into debt and hardship during this time, the effect can be much more long-lasting.

“Low social security payments place people at risk of housing arrears and the devastating effects of homelessness, not to mention the health impacts of starvation, poor or insufficient diets, and cold, unheated homes. The marks of that hardship can hold people back for years.

“We need to see investment in social security, to reach adequate levels to support people in need and offer them the chance to live with dignity. This report shows that the current system is failing to do that.”

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