By Emma McClelland and Olivia Vicol - 24 March 2022
In his Spring Statement to the House of Commons, the Chancellor of the Exchequer promised to help working families by raising the National Minimum Wage to £9.50/hour, and raising the National Insurance threshold to £12,570. But while these measures offer some good news for full-time workers, the statement left Universal Credit claimants hanging by a thread, with an increase of just 3%, at a time when inflation is projected to reach almost 9%. This blog post explains what it's like to get by on Universal Credit, and why claimants deserve better.
Ana* is many things: a resilient woman, a mother of two, a loving daughter, and a survivor of domestic violence. After being evicted by her ex-partner's family, she moved into a property with her parents, where she shares a bed with her two primary school-age daughters.
Ana first came to us for help with school enrollment, applying for Universal Credit and Child benefit. She struggles to access welfare support. She holds pre-settled status and, due to her ex-partner's wishes, has never worked in the UK. As such, the DWP is reluctant to recognise her as being eligible for means-tested benefits.
Ana does not have a UK bank account or passport; just her ID and a few letters from her GP. The landlord is keen for her and her children to find somewhere else to live. If she could find a part-time job, this could help her get back on her feet but she has been waiting for a year for her younger daughter to start attending school, despite her being on three waiting lists.
Ana does not have access to WiFi at home. She tops up her Lebara so she is able to call the GP and the hospital, as her other daughter needs several surgeries. Without having access to the internet, applying for jobs is a challenge. Her parents, whom she relies upon, work full time in precarious employment. Trips to the local food bank are not uncommon.
With the cost of living crisis progressing at an alarming rate, Ana's situation is likely to get worse. Her parents will not get an increase in their wages this year. The prices of food and energy are steadily increasing and households like Ana's are being put under unimaginable pressure.
With inflation at almost 9%, the value of Universal Credit is unlivable
At the Work Rights Centre we watched the Chancellor's announcement, waiting for a lifeline for those struggling to make ends meet. We had hoped the Chancellor would increase benefits in line with inflation - which the OBR has projected to reach a 30-year high at almost 9% this year. Instead, he barely even mentioned benefits at all.
The current government plan is to encourage Universal Credit claimants to work, by allowing them to keep more of their earnings. From April this year, benefit claimants will have their work allowances (the earnings above which they start seeing reductions in their benefits) increased by £500 per year, and will see their Universal Credit payments reduced by 55p for every £1 if they earn above their work allowance - this is down from the current 63p. It's a minor concession. But it does little to address the crisis of in-work poverty. As many as 40% of claimants are already working in positions that simply don't pay enough.
Increasing Universal Credit by 3.1%, as the Chancellor promised, is better than nothing, but only in the same way that half a life jacket is better than no life jacket at all. When inflation is projected to increase at nearly 9%, it's still not fit for purpose. One in two of the people who contacted the Work Rights Centre last year reported having no savings, and in most cases this was less than three months. This Spring Statement leaves them hanging by a thread.
One in two people lacked any savings
The exclusion of benefit seekers from the Chancellor's statement shows the government is oblivious to the struggles of millions of people. People like Ana and her family. Or Nina*, another beneficiary who called us recently from hospital after giving birth to her baby prematurely, to ask for a foodbank voucher.
The people we support are often unable to work or trapped in precarious work, where the pay is so low and the shifts so irregular that they are effectively forced to rely on Universal Credit in order to make ends meet. They deserve better. The government must protect the most vulnerable by increasing Universal Credit payments. Without such a step, the seriousness of the situation facing beneficiaries like Ana and Nina is only set to get worse.
*Names changed to protect anonymity.
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To demand an increase to Universal Credit, write to your local MP.
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