In order to mimic work, particularly monthly salaried employment, new claimants have to wait five weeks for their first payment. But many low-income households don’t have the savings to last that long and so have to borrow, incurring debt.
The DWP will pay an interest-free advance, equivalent to the first month’s payment, but will then automatically recover the money from subsequent Universal Credit payments, for up to two years.
Citizens Advice say that in 2025 two-thirds of the people they helped in relation to repaying loans to the DWP also needed help accessing food banks.
The five-week wait needs “urgent attention”, says David Mendes da Costa, principle policy manager at Citizens Advice charity.
“Universal Credit is meant to be a safety net, not to trap people in debt from day one, but that’s exactly the situation our advisers see every single day.”
Unemployed Olivia Diss from Essex says the standard £317 a month under-25s allowance “gives some sort of income but it’s not enough to live on.” She’s having to rely on her parents to help out, but bemoans the need for them to do so.
“It assumes,” says Diss, “that parents will bridge the monetary gap. It fails to factor in an effective way of exiting unemployment and entering the world of work as a self-sufficient adult.”
