Two-thirds of families on Universal Credit have been forced into lockdown debt

17 June 2020, 07:52

Half of families have said they are behind on bills during the Covid-19 pandemic
Half of families have said they are behind on bills during the Covid-19 pandemic. Picture: PA
EJ Ward

By EJ Ward

The Government is under pressure to provide a financial lifeline to families who are claiming benefits as research suggests around two-thirds are being forced into debt due to the coronavirus lockdown.

Ministers are under pressure to provide a financial "lifeline" to families receiving Universal Credit as research suggested around two-thirds have been forced into debt during the coronavirus lockdown.

A survey of 3,105 parents of children under 18 claiming either Universal Credit or Child Tax credit over the last six weeks found that 60 per cent of families had turned to payday loans or credit cards.

The research, carried out jointly by theJoseph Rowntree Foundation and Save the Children, also found 86 per cent of families have faced increased household costs, with 70 per cent suggesting they have had to cut back on food and other essentials.

The research comes just a day after Boris Johnson's U-turn over free school meal vouchers being provided to eligible pupils during the summer holidays, following a high-profile campaign by Manchester United footballer Marcus Rashford.

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Downing Street on Tuesday announced a one-off £120 million fund which will benefit some 1.3 million children in England over the six-week summer period.

Rashford said he was "grateful" that Boris Johnson changed his mind, while the PM congratulated the player and said the policy change was the "right thing to do".

Mr Johnson will appear before MPs at Prime Minister's Questions on Wednesday afternoon.

He has been privately criticised by some Tory backbenchers for the time taken to announce the policy change on free school meals and is under growing pressure to reduce the two-metre social distancing rule to help revive the economy.

The Prime Minister said, "watch this space" in response to pressure to ease the rule, which businesses including shops, bars and restaurants say limit their ability to reopen.

The need for action to support the economy was underlined by official figures which showed a sharp drop in the number of paid employees - down by 2.1% or 612,000 in May compared with March - and a huge increase in benefit claims.

Although the UK jobless rate remained largely unchanged quarter-on-quarter at 3.9% in the three months to April, with unemployment at 1.34 million, there are fears that more redundancies could follow as Government support is withdrawn over the coming months.

The Work and Pensions Select Committee will also hear evidence on the problems experienced by Universal Credit claimants as part of its inquiry into the five-week wait for a first payment.