Citizens Advice Scotland (CAS) has repeated a call for the abolition of the 5 week wait for new Universal Credit claims and the introduction of a non-repayable assessment period grant for everyone claiming Universal Credit to help prevent individuals in Scotland from being dragged into a problem debt cycle.
The Scottish debt charity ran a survey of their clients and found that the wait for a first payment was causing stress and anxiety for those respondents to the survey.
The survey was based on over 600 people who had sought universal credit advice in Scotland between March 2020 and December 2020.
- 70% said they found the application for Universal Credit to be stressful.
- Nearly 50% said they had to borrow or take an advance to get through the 5-week wait.
- Among those that borrowed to get them through the 5-week waiting period until they got their first payment, 65% said they will find it difficult to repay the loan.Single people, homeless people, and people without a final wage were more likely to require loans during the 5-week wait, saddling them with debt before their UC payments have even begun.
- Single-parent families were also more likely to borrow during the five-week wait, meaning children in those families may face significant financial hardship before the first payment.
‘Universal Credit should be a safety net, not an obstacle course’
Speaking on their findings, the Scottish debt charity’s spokesperson Nina Ballantyne advised:
“CAS has long campaigned to end the five-week wait for the first payment, and today’s research shows the considerable detriment it continued to cause people throughout the pandemic.
The five-week wait punishes the most vulnerable; those without savings and without family or friends to borrow from and those who are paid weekly who don’t have a final monthly salary payment to rely on.
Many are also reluctant to take on additional debt.”
As the country continues to recover, the Scottish debt charity further predicted that another influx of Universal Credit claims are expected when access to the Job Retention Scheme (furlough) is removed after September, and with the UK government also cutting the £20 additional payment in October these are worrying times for those most affected by redundancy and furlough due to the financial impact of the Coronavirus pandemic.
From August onwards, the government will reduce their contribution from 80% in June to 60% in August & September with the employer expected to pick up at least the minimal 20% contribution, further causing anxiety for employees and employers alike, particularly in those sectors most affected both pre and post ‘freedom day.’
Getting money and debt advice in Scotland
As well as CAS, you can get impartial help with your money from Money Helper. By using the free services offered by either CAS or Money Helper, you can get guidance on a range of issues from benefits, pension and retirement and housing advice.
If you are worried about your finances and in need of help with debt, the best advice is to not ignore the situation and try to deal with the debt issue as soon as you possibly can.
If you’re unable to contact the people you owe money to and make your own arrangements, then you should seek advice from an experienced debt advisor in order to understand the severity of your situation, and any possible options available to help you deal with your debt.
As Scotland’s leading debt solution company on Trustpilot with over 4,000 reviews, we are in a position to advise you on the advantages and disadvantages of formal debt solutions such as Trust Deeds, the Debt Arrangement Scheme (DAS) and alternatives such as Sequestration and the Minimal Asset Process route into Sequestration.
Our experienced debt advisors provide tailored debt advice and every year guide many Scots towards life after debt.