UC families face £570 real terms income cut as costs surge

Published on: 
16 February 2022
Written by: 

John Dickie

Director of CPAG in Scotland

Tuesday 15th February 2022

For immediate release

 

NEW DWP FIGURES: Over 250 000 children in Scotland in families on universal credit

· These UC families face £570 real terms income cut as costs surge, say child poverty campaigners

DWP figures out today show 254 393 children in Scotland were in families on universal credit (UC) in November– (3.6 million across GB). Analysis by the Child Poverty Action Group (CPAG) shows that because universal credit is set to rise by only 3.1% this April when inflation is expected to peak at 7.25%, most of these families face a real-terms cut of around £570 per year in UK social security support, just as supermarket prices and energy costs surge. For families subject to the benefit cap, the loss will be even greater.

 

Universal credit statistics

Today’s DWP figures shows that across Great Britain 2 million families with children were receiving UC in November, over 140 000 in Scotland. Over 40% had a child aged four or younger. Universal credit was cut by £20 per week in October. Around 40% of UC claimants are working.

CPAG is calling for an increase in UK social security payments of 7% this April to match the expected inflation rate. And to ensure the increase reaches every family that needs it, the charity wants the benefit cap removed. There are already 4.3 million UK children living below the poverty line, 260 000 in Scotland alone.

John Dickie, Director of Child Poverty Action Group (CPAG) in Scotland said:

 

The families behind today’s figures are battling to stay afloat against ever higher prices and a real terms cut in vital social security support. Unless the UK Government acts the children in those families will inevitably feel the effect, as parents are forced to cut back even more on food, heating and basic essentials. Increasing benefits in line with the expected inflation rate this Spring is the minimum protection needed and would send a signal to desperately worried families that they have not been forgotten.

 

Mr Dickie went on to welcome the Scottish government’s decision to double the Scottish child payment from April;

 

“Here in Scotland the Scottish child payment is providing much needed extra support to many, many families with children under six. The doubling of its value and roll out to all eligible under 16s really can’t come soon enough. But there is no question more is needed and we would urge Holyrood Ministers to go further to protect more families this Spring by also doubling the Scottish child bridging payments being made for school aged children.”

 

Families in poverty and rising costs:

Food:

This spring, food costs alone are set to be £26 a month higher than last year for families with children in poverty, according to CPAG’s analysis.

 

Energy:

With energy bills due to increase by 54 per cent in April, CPAG’s analysis finds families with children below the poverty line face:

· £35 per month in extra energy costs even after the Government’s new mitigation measures are factored in

· these families are set to spend three times the share of their income on energy, compared to better-off families (17% and 5% of disposable income after housing costs, respectively)

Existing data shows lone parent families in poverty face having to spend around £1 in every £4 of their disposable income to use the same amount of energy this April, even after the government’s council tax rebate scheme is factored in. Couple-families in poverty will spend £1 in every £7.

 

Universal credit national and regional breakdown:

Region

Number of children in families receiving UC (Nov 21)

Number of families with children receiving UC (Nov 21)

Number of families receiving UC with children under 4 (Nov 21)

North East

171,850

92,703

41,019

North West

486,227

256,440

116,674

Yorkshire and The Humber

338,668

177,386

81,793

East Midlands

263,956

139,850

63,455

West Midlands

388,440

201,238

93,420

East of England

317,573

170,044

76,144

London

558,178

307,736

134,977

South East

421,065

226,374

101,928

South West

266,131

143,444

62,516

Wales

175,222

94,399

42,115

Scotland

254,393

142,980

60,619

 

Notes to editors:

 

CPAG’s short briefing on its analysis is here. A breakdown of today’s universal credit data by local authority is available from CPAG’s press office. The DWP statistics are here

 

All UK benefits are due to rise by 3.1% (last September’s inflation rate) this April.

 

The Scottish government has committed to doubling the Scottish child payment from £10 to £20 per week from April. The payment is currently paid for children under 6 in families in receipt of universal credit and equivalent legacy benefits. It is to be rolled out to all eligible under 16s by end 2022. In meantime bridging payment equivalent to £10 per week are paid for children entitled to free school meals

iving

The benefit cap limits the amount of benefit a household can receive. Most people affected by the cap are families with children (83%) – often in areas of high housing costs - and of these most (63%) are headed by a single parent, more than half of whom have at least one child aged under five. It is particularly difficult for single parents with very young children to escape the cap by working (or working more).

 

The level of the benefit cap hasn’t been revised since 2016 so the shortfall in the social security support that capped families receive, compared to what they need, has grown accordingly. The level of the cap is set at £23,000 per year for couples/lone parents in Greater London (regardless of the number of children) and £20,000 for couples/lone parents outside the capital.

 

contact: John Dickie, Director of CPAG in Scotland on 07795 340 618 or Jane Ahrends, CPAG UK press officer 07816 909302