Planning & Budgeting

Charities warn against discontinuing £20 a week Universal Credit hike

· 3 min read

Fifty charities have written a letter to Chancellor Rishi Sunak, urging him to make the pandemic uplift payment to Universal Credit benefits permanent. The £20-per-week boost, they say, could save close to a million people from falling into extreme poverty in the coming months, in which extreme economic hardship and mass unemployment are expected.


Fifty charities have written a letter to Chancellor Rishi Sunak, urging him to make the pandemic uplift payment to Universal Credit benefits permanent. The £20-per-week boost, they say, could save close to a million people from falling into extreme poverty in the coming months, in which extreme economic hardship and mass unemployment are expected.

The letter follows the Chancellor’s announcement of his latest COVID-19 support package last week, which failed to mention whether the temporary increase to Universal Credit would be continued.

The coalition of groups warns of dire consequences for thousands of families should these benefits be withdrawn. While it seems a nominal amount, the £20-per-week increase brings an additional £1,040 per year to households who rely on the benefit, enabling them to cope with the increasing economic pressure as a result of the virus.

As per a recent analysis by the Joseph Rowntree Foundation, the discontinuation of the uplift benefit could affect 16 million people in the lowest income groups. An additional 700,000 people, of which 300,000 are children, would be driven into poverty. Furthermore, 500,000 people who are already in poverty would be even more profoundly affected – falling to more than 50% below the poverty line. Most of the affected households would be disproportionately skewed towards single parents, the disabled, and black and minority ethnicities.

The government would need to pay around £9 billion per year to make the uplift permanent.

As stated in the letter to the Chancellor, “Falling incomes and rising costs throughout the pandemic have put families under immense financial pressure, but the £20 uplift has been a lifeline that has enabled many of them to keep their heads above water and has stopped us seeing a marked surge in poverty levels."

The government recently announced its plans to boost employment, by supporting vocational training for over 18s. While the charities have welcomed this move, they also cautioned a robust benefits system is needed to accompany this program, to ensure people are equipped to grasp these opportunities, while remaining protected against long-term financial difficulties.

As well as urging the government to make the uplift permanent, the charities have also requested this boost be offered to claimants of legacy benefits, who are currently not covered under this scheme. Since the majority of these claimants includes sick people, the disabled, or carers, it would offer these vulnerable groups a chance of surviving the harsh financial constraints of the months to come.

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The Universal Credit scheme has previously come under fire for failing to live up to its promise of protecting the elderly. The long payment processing times and unfavourable eligibility criteria have made it increasingly challenging for over 50s to reap any real benefits from the scheme. While the temporary increase in the allowance has provided some respite, the charities have warned that circumstances could revert quickly if the support is discontinued.

Rhea Tibrewala
Rhea Tibrewala
Rhea has had over 5 years of experience in the finance sector, having worked as a digital marketing manager for leading financial institutions across multiple geographies. She is a tech fanatic, an avid reader, and enjoys travelling and music in her free time.
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