Universal Credit: a chance to boost living standards for those on low incomes

One way to right the wrong of in-work poverty is by using Universal Credit (UC) to loosen the grip of poverty on struggling families.

Everyone should have a decent standard of living and chances to get on in life, no matter who they are or where they’re from. Yet millions of people – over half of whom live in working families – are living in poverty.

The number of people now claiming UC is 770,000 and it plays a central role in protecting them from the harmful impacts of poverty – but only if we listen to those claiming UC and redesign the bits that aren’t working.

Last year’s Autumn Budget showed the Government is listening and will respond to evidence of problems with UC. New research from JRF and Britain Thinks highlights people’s experiences of claiming UC - where it’s working and the restrictions it places on their lives. It also identifies opportunities to use UC to ensure people have a decent living standard, especially where they are in work. The priorities they highlighted were:

More help at the application stage

People were unclear about what information and evidence they would need to complete the online application form. Some clearer guidance and – in some cases – someone to sit with them and help complete the form would make a difference. One working lone parent we spoke to in Runcorn had to make five separate trips to her local library before she managed to fully complete the form, and the lack of a 'save and continue' function meant she had to start the form from scratch each time.

UC will roll-out to many more areas in the coming months. Local authorities have been allocated some money to help provide support with budgeting or using online services. It’s essential MPs, councillors and local voluntary organisations are asking whether their area is ready to provide the support that people are going to need.

Training for staff

Some Job Centre staff were described as treating claimants rudely and in ways that left them feeling anxious and dreading appointments. By contrast, people thought a more positive and encouraging environment would make for a more effective service that would deliver on the goals of UC.

A perceived lack of accurate, clear and consistent guidance from Job Centre staff and those on the Universal Credit telephone line only served to heighten anxiety, as it resulted in mistakes being made. For example:

(I received) absolutely no advice on what receipts I needed to bring in for it (childcare) … The worst thing was that they didn’t say (the receipt provided) was wrong. It was only when I saw my first Universal Credit payment and there was no money for the childcare there that I found out.
In-work participant, Runcorn

Those with experience of claiming UC thought better training would improve the service.

Ultimately though, it’s about living standards

By the end of this parliament UC will be fully rolled out, and it will shape living standards for those on the lowest incomes. Those already claiming it described some of the difficult decisions they had to make:

It was (my son’s) birthday in September … and I couldn’t even pay my rent, because I’m not going to say to him I’ve got no money I’m not going to get you a present.
Out-of-work participant, Newcastle

One priority people highlighted is the need to make sure it pays to work, so they can build a better life.

At the minute, the way it is, you’re not encouraging people to work harder ... it’s got to be worth your while.
In-work participant, Newcastle

The amount someone can earn before the help they receive from UC starts to be taken away (known as the Work Allowance) was cut in 2016 making it harder for people to work their way out of poverty. Increasing the work allowances to their original level would help 3 million households and protect 340,000 people from poverty.

UC can be an anchor for people that might otherwise be swept away in the rising tide of poverty in the UK. However the new system will only live up to its potential if we continue to identify and fix problems as they surface. Helping people successfully move onto the system in the first place is a good starting point, but ultimately, it’s the living standard UC guarantees to the lowest income families that must be the priority.