The freeze on welfare benefits has left more than a third of claimants with less than £100 a month to live on after they have paid rent and essential bills for food, gas and electricity, according to the Citizens Advice service.
Rates for benefits such as Universal Credit, tax credits and local housing allowance have been frozen since April 2016. This has saved the Government many billions of pounds, but it has inflicted a six per cent cut on claimants’ incomes.
Universal Credit claimants have been particularly badly affected, with more than half reporting they had gone without essentials such as food and toiletries. Almost the same proportion say they had lost sleep over their dire finances.
Disabled people and those with children were most likely to have gone without essentials, with nearly half of both groups reporting that this had happened to them at least once in the past 12 months.
Citizens Advice called on the Government to end the freeze on benefit rates and reduce the five-week wait for a first Universal Credit payment. Although the freeze is scheduled to end next April, this has not yet been confirmed.
Gillian Guy, the chief executive of Citizens Advice, said: “The benefits system is designed to help people with their finances in times of need, but too often our frontline staff and volunteers see a different story.
“We’ve found people are losing sleep and unable to afford essential things like food and housing while receiving universal credit. It is totally unacceptable that our benefits system is not providing the financial safety net that people need.”
The average low-income couple with children would be £200 a year worse off this year as a result of the benefit freeze and poorer single parents £250 a year worse off, the Resolution Foundation has estimated.
A Government spokesperson said: “Tackling poverty will always be a priority for this government. There are no current plans to extend or maintain the benefit freeze after March 2020. Income inequality and absolute poverty are lower than in 2010, but we know some families need more support, which is why we continue to spend £95bn a year on working-age benefits.
“Universal credit is supporting more than two million people and it’s working for the vast majority. Advance payments provide money urgently for people if they need it and there are measures in place to ensure repayments are affordable.”
By Patrick Mooney, Editor