Universal Credit cut: Everything you need to know

Over the coming weeks, people claiming Universal Credit will receive notifications about a cut to their benefits this autumn.

Last week, Wales’ first minister Mark Drakeford directly appealed to Chancellor Rishi Sunak not to take away a £20 a week Universal Credit uplift given to help struggling families during the pandemic.

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.

Regions that will see the biggest proportion of residents hit by the cut are London and the North East.

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.”

Morgan Wild, Head of Policy at Citizens Advice, said:

“More than half a million people have come to Citizens Advice for support with Universal Credit since the pandemic. We know the extra £20 a week has often meant the difference between empty cupboards and food on the table.

“The government should do the right thing and keep this vital lifeline. It’s the best way of making good on its ‘levelling up’ promise and supporting households to recover from this crisis.”