Anti-poverty campaigners have warned that vulnerable families could be forced into destitution this winter due to the impact of universal credit deductions. More than 800,000 households on universal credit received less money last year because they were previously awarded too much in tax credits, according to BBC findings. The Department for Work and Pensions (DWP) can reduce monthly benefits by up to 25% to recover debts, including mistaken overpayments or debts to creditors.
Food inflation remains 30% higher than two years ago, and energy prices are around double their 2021 levels despite a recent dip. Research shows this disproportionately affects poorer households, who spend twice as much on food and energy as wealthier ones. Debt charities have warned of a 'debt timebomb', with personal debt levels rising by an average of £791 per UK adult between 2022 and 2023.
Kellylee, a universal credit claimant from Greenock with three children, has over £150 deducted from her fortnightly payments for advanced payments and a spare bedroom. She is left with around £400 every fortnight, which quickly goes on bills and essentials, forcing her to rely on food parcels. 'If I didn't have the deductions I would be able to just make ends meet,' she said. 'The government could put a hold on the deductions for people just so people have time to recover a little bit from the cost of living.'
Recent data shows that total monthly deductions from Scottish universal credit recipients increased by £600,000 between December 2022 and February 2023, with 12,000 more households impacted. In England, the number of families facing deductions rose by 122,200, and the amount deducted increased by £6.6 million. In Wales, deductions increased by £394,000, affecting 7,400 more families.
SNP MP Chris Stephens, who obtained the figures, said deductions are pushing people into 'deep financial hardship' and called for an amnesty on deductions resulting from DWP errors. Chris Birt from the Joseph Rowntree Foundation expressed concern about budget advances requested during the five-week wait for universal credit, which are later deducted. Some politicians are urging the return of the £400 energy rebate to help shield families from further price rises.
