The poorest people are drowning in debt because the Tories are refusing to protect them during the coronavirus crisis.
Nearly two thirds of families who receive Universal Credit (UC) have been pushed into borrowing money to get by, according to new research. Many are relying on payday loans or credit cards.
The Joseph Rowntree Foundation and Save the Children charities said people face a debt “nightmare”. Around eight million children across four million families are affected.
Barbara and Harry care full time for their grandson. They have received UC since Harry contracted coronavirus and was unable to work.
Barbara said, “Financially, it’s just a nightmare. After the bills are paid and you’ve got the food in, there’s just no money left. There’s just no money.”
Over two thirds of those surveyed said they had been forced to cut back on food and other essentials. Half had fallen behind on rent and other bills.
Barbara said the change was a big shock. “You’re getting people calling and asking why your bills haven’t been paid, and you just don’t have the money. It’s stressful when you’ve gone years and years paying your bills, and then all of a sudden you can’t pay them.”
She added, “It’s the children that suffer. If they need a new pair of shoes it means taking out a loan – then you’re getting deeper into debt.”
The charities said the vast majority of people with children on UC or Child Tax Credits – 86 percent – have faced extra costs because of the pandemic. These can include the extra costs of feeding children who aren’t at school in the day, and of using extra energy due to being at home more.
Dan Paskins from Save the Children said families are being “forced to make impossible choices” such as whether to buy food or top up their electricity meter.
Two thirds of those surveyed said money worries had affected their mental health – while a quarter said it had had a severe impact.
The research comes the day after new figures showed that nearly three million people are officially unemployed. Some estimates predict it will be four million by December – a rate of 10 percent.
More people will be thrown out of work as the Tories wind down their furlough scheme, which pays some wages to workers who can’t be in work.
But not everyone is affected equally by the lockdown. The charities found that parents who were poor before it are 50 percent more likely to have lost their jobs than those who were better off.
Since the coronavirus crisis began, the number of families claiming UC has nearly doubled. Some 2.6 million were on UC before – and over 2.3 million new applications have been made.
The charities called for the government to urgently raise the Child Element of UC and Child Tax Credit by £20 a week. It amounts to just £2.85 per child per day – that, and more, is easily affordable.
Pressure from below this week forced the Tories into a humiliating U-turn over free school meals. They had repeatedly said they would not provide free school meals to poorer children during the summer holidays.
But on Tuesday Boris Johnson announced that the Tories would provide them.
For all their bluster, the Tories fear the growing anger among ordinary people at being asked to pay the price of the crisis. Putting more pressure on them can win more.
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