Citizens Advice South Lincolnshire finds many on Universal Credit struggle to pay basics such as rent, council tax and energy

People in South Lincolnshire claiming Universal Credit often struggle to afford basic ‘essential outgoings’ like food, energy and council tax, says a new report exploring how the state benefit impacts the lives of local people.

The in-depth study by Citizens Advice South Lincolnshire lays bare the huge ramifications the cost of living crisis and higher bills have had on some of the county’s poorest homes.

It paints a bleak picture, where monthly benefit payments haven’t kept up with constantly rising bills, which is regularly leaving some households with a monthly deficit and few options of being able to close the gap.

What is Universal Credit?

Universal Credit is a means-tested payment that either replaces or helps to supplement a person or couple’s income.

Paid monthly – people may be eligible if they are on lower incomes, can’t work or are out of work but looking for a job.

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How much someone receives can vary greatly depending on their age, the people in their household, their health, income, whether they’ve got any existing savings and their living arrangements.

However, while the amount paid every month has risen in line with inflation, the cost of core outgoings such as gas, electricity, council tax or rent are still climbing, say researchers.

The report explains: “These amounts are still increasing as the cost-of-living crisis continues to take hold. These outgoings are not inclusive of other bills including toiletries, childcare, mobile/telephone bills, sanitary products, medications/prescriptions or personal goods and services such as clothing, school uniform, holidays, entertainment and television subscriptions.”

The cost of living in South Lincolnshire

Nationally 6.1 million people are collecting Universal Credit – but this number is expected to go up as the Department of Work and Pensions phase out other benefits such as Jobseekers Allowance or Housing Benefit and move people onto Universal Credit payments instead.

However recent DWP data suggests the number of people claiming in Lincolnshire, Nottinghamshire and Rutland has already risen significantly in the past year.

There have been 14,520 more claimants between August 2022 and August this year – a rise of 9% – that takes the the total number now picking up the monthly help to 175,016.

In South Lincolnshire the number needing extra cash to survive is also increasing. In Spalding there has been an 11.7% leap year-on-year to 8,225 claimants and a 6.7% rise in Grantham where there are now 6,171 people in receipt of Universal Credit.

Figures for Stamford, says the report, have been affected by the ‘reallocation of district postcodes’ however there a 1.4% increase has been calculated with 4,967 people now getting monthly financial help.

Example case studies

In an attempt to illustrate just how difficult some households in South Lincolnshire find it to make ends meet, a handful of ‘illustrative examples’ have been included within the report.

Among the imaginary case studies is Harry, aged 29, who lives in a privately rented one-bedroom property in Grantham in council tax band A.

Harry doesn’t work, explains the example, because he is a ‘responsible carer’ for a family member.

As a single person with no children he is given £922.93 a month in Universal Credit, which is made up of a standard payment of £368.74 for a single person with no children, £368.33 in housing support, plus a carer element of £185.86.

However, explains the example, his core outgoings including rent, council tax and energy payments are £1,046.77 a month leaving him with a constant shortfall of more than £120 - and that’s without factoring in other costs such as toiletries, medication or a phone bill.

Finding the cash

The ‘housing element’ of a Universal Credit monthly payment is often not enough to cover rent in the county, declares the study having collated the answers to a survey it organised as part of its research.

Analysis also found:

*Claimants who need to pay a top-up to cover their rent are forced to use other money, borrow from friends or family or – at worst - they fall into arrears.

*Those who need help paying a mortgage also do not receive any financial help from the housing element of Universal Credit, which leaves any homeowner in difficult circumstances with ‘few places to turn’.

*Respondents to the Citizens Advice survey often had ‘multiple debts’ at any one time - the most consistent of which were rent arrears or council tax arrears.

*Food is ‘too expensive for many Universal Credit claimants, and to get by it is likely they prioritise it over dealing with bills.

*Agape foodbank in Spalding spent more on food in the first quarter of this year than it did in the whole of 2022 suggesting monthly UC entitlements, which don’t cover the cost of food, leave many claimants going without as their other core outgoings have increased.

Help for the future

Universal Credit payments are not always enough to meet living standards in South Lincolnshire, concludes the report.

It reads: “In terms of whether Universal Credit is enough to meet living standards, our research indicates that people are struggling to manage as almost 33% of people are struggling with food or getting behind with their rent.

“There are deficits in either food or living bills that the benefit cannot currently meet (even after rising close to in line with inflation).”

Increased help with council tax, a flexible housing element that covers rent differences between social housing and private properties and payments of Universal Credit that continually increase with inflation are among the ongoing improvements the service says it would like to see so that the money makes a difference to people’s lives.

It adds: “We know that if Universal Credit is further improved it will have a positive impact on people’s lives, reduce hardship and stress on many levels and greatly improve mental wellbeing.

“Our local communities would exponentially benefit due to having increased finances, which will be a contributory factor in avoiding further hardship and people would also be and feel better supported.

“As a local service we observed that the £20 uplift during the height of the pandemic ensured that claimants were able to manage a lot better. A reintroduction of a similar uplift or measure demonstrates what a substantive difference changes can make.”

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