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How Universal Credit is affecting people's health, wealth and wellbeing

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We saw a 133% increase in residents claiming Universal Credit between March and October 2020. Our research shows that it's vital that the system works effectively so people are properly supported.

Published: 29/01/2021

In our latest research, Credit where it’s due? Claiming Universal Credit during the Covid-19 pandemic, we analysed our residents’ experience of Universal Credit during the pandemic.

The number of job vacancies in London is 44% lower than in March 2020 and just 15% of Peabody residents who lost their job because of the pandemic have found paid work again. We found that the five-week wait for Universal Credit, additional delays and mispayments, and difficulties in the claims process has led to growing financial struggles and new mental health problems.

Surveys of our residents claiming Universal Credit since the first lockdown in March 2020 show that:

  • A quarter of new claimants waited longer than 5 weeks to receive their first payment.
  • 29% had to apply for an advance loan during the period, resulting in their payments now being docked each month to repay the government. 
  • 1 in 5 new claimants found the process difficult or very difficult and 1 in 10 suffered from payment delays or mispayments. 
  • 20% of new claimants said that the Universal Credit experience had affected their mental health. Of those 44% reported developing a new mental health problem and 31% said that claiming had worsened an existing mental health condition.

The average rent for a Peabody home in London is £120 a week and support is available through our dedicated resident wellbeing and financial inclusion teams.  

Peabody Chair, Lord Bob Kerslake said:

"That the Universal Credit system has not collapsed under the strain of millions of new applications is positive. However, the experience of the majority of people making a claim shows that the system is still failing to provide adequate support. The difficult times are set to continue for some time yet so it is really important that the government gets a grip of the problems as other financial support winds down.

"We need clarity from Ministers that the £20 a week uplift will remain in place, but more changes are needed. Five weeks is too long to wait for money, loans just reduce people’s incomes in the longer term, and the system is still complex to navigate and riddled with errors. We urge Ministers to bring forward a comprehensive improvement plan so that Universal Credit can provide the safety net that is desperately needed in these challenging times."

Chair of the Work and Pensions Select Committee, the Rt Hon Stephen Timms MP commented:

"I welcome this research, highlighting serious problems with the current version of Universal Credit. The scale of mental health problems is particularly troubling. The Department regrettably rejected our plan for starter payments to tide families over the five-week wait for their first benefit payment, and has refused even to look into the problems the five week wait is causing."

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