Charity worries welfare cuts may push more of the most vulnerable into debt

Stewart McCulloch, Christians Against Poverty’s Chief Executive Officer, says ​“We understand the Government needs to try and prevent the welfare bill from rising substantially in the coming years, but we believe investing in people, instead of cutting their income, is the way to achieve this. Many people in receipt of PIP Daily Living rely on this additional support to help them with everyday life. The prospect of potentially losing this vital source of income will create high levels of anxiety for some of the UK’s most vulnerable households. 

“We are in constructive discussions with both the Treasury and DWP and are providing insights to help support the development of policies that tackle the root causes that trap people in poverty. We warmly welcome the proposal to remove the reassessments for people with lifelong conditions, but changing PIP eligibility criteria, and reviewing the assessment may put some of the most vulnerable at risk of falling into unmanageable debt. 

“CAP is still deeply concerned about people with additional needs who are on low incomes especially as essential bills such as energy, water and council tax bills are about to rise for many in April. Funding for tailored, free face to face debt advice support designed to help people with additional needs is also shrinking. Our worry is that some of the most vulnerable may fall into debt and not have the tailored debt support they need to get them back on their feet. 

“Our local debt coaches and church befrienders are visiting individuals and families who often rely on this support and they’re already very isolated, living in cold homes with empty cupboards, as they struggle with a range of complex and challenging circumstances that have led them into debt and poverty.”

“CAP welcomes the rise in the standard Universal Credit allowance by £775 as a positive starting point. 

“People have been facing years of deficit budgets where their income isn’t covering the cost of essentials, this planned rise in Universal Credit will be a welcome announcement. But with the increase expected to come into place next year, this still leaves people in precarious positions in the coming months as prices set to rise more in April. 

“CAP is encouraging anyone who is facing problem debt at the moment to reach out for support. There is free non-judgmental FCA authorised debt advice available in communities across the UK.

“CAP is also welcoming changes designed to help people back into employment. As a charity that helps people back into work via our free job clubs running at local churches, we fully support the DWP’s efforts to help people into employment. 

“We agree that we should be doing as much as we can to help people that can work to find suitable good employment. However, as a charity that works with people who have complex needs, we know that it’s vital this is done by offering supportive training that understands each individual’s challenges and helps them to overcome barriers to work. 

“Ensuring that employers are able to offer the right type of opportunities and support is also crucial for this to be successful.”

Whilst CAP welcomes the rise to the standard element of Universal Credit, the new rate still does not give people enough to ensure that they are able to afford the essentials, and people will have to wait until 2026 to experience this uplift. 

The charity also wants employers to ensure wages are sufficient to prevent any employee from facing a situation where, despite working, they are still unable to afford their essentials and face a deficit budget.

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