£ 360million Covid’s rent debt crisis will only worsen as universal credit cuts, charity warns
Looming universal credit cuts are expected to worsen a £ 360million rental debt crisis across the UK that emerged during the Covid-19 pandemic, a charity has warned.
Calculations by StepChange Debt Charity, which offers free debt advice, showed that around half a million private tenants are now trying to stay above £ 360million in rent arrears through the country, with private tenants in arrears of just under £ 800 on average.
The charity warned on Friday that the government’s planned £ 20-a-week universal credit cut would worsen the crisis by exacerbating entrenched difficulties.
“The Covid support programs, while a lifeline for many, have not been able to help tenants settle their arrears and with universal credit cuts and the impending end of holidays, there is a real danger that thousands of people will lose their homes, ”Phil Andrew, CEO of StepChange, said.
Andrew added that his charity was calling for “dedicated financial support” to help tenants safely reduce their rent debts and keep their homes.
“By creating a dedicated rental debt fund and removing the planned reduction in universal credit, the government can avoid the threat of increased evictions, problematic debt and homelessness that will exacerbate financial and social problems. and hamper economic recovery, ”he said.
StepChange’s research, which included responses from more than 8,600 people, also suggested that about one in ten working tenants should be evicted from their home because of their debts over the next 12 months.
The charity has highlighted the case of a woman who works for a travel agency and was left with £ 2,000 in rent arrears during the pandemic.
“My husband suffers from a long Covid and although he is at work the stress of not achieving his goals is really affecting his mental health,” she said.
“He earns just enough to pay the rent, but not enough to be able to contribute to the arrears. “
Earlier this month, the Financial Time reported that internal government modeling showed that the reduction in universal credit would lead to an increase in homelessness and the use of food banks, with a Whitehall official telling the newspaper the impact could be “catastrophic.”
However, a spokesperson for the Ministry of Work and Pensions insisted last week that no formal impact assessment had been carried out for the decision.
On Monday, Work and Pensions Secretary Therese Coffey sparked anger by suggesting universal credit applicants should simply work more hours to make up for the £ 20 per week cut.
“We’ll see what we can do to help people maybe get those overtime hours, but ideally also to make sure they’re able to get better paying jobs as well,” Ms. Coffey said. BBC breakfast.
This suggestion was later challenged, as Universal Credit payments are designed to automatically adjust to reflect someone’s income level, meaning someone earning an extra £ 20 per week would also lose some of their income. benefits.
Additional reports by PA