Families set to lose more than a thousand pounds in universal credit cut

On 6 October, the £20 a week increase to the universal credit standard allowance, introduced last March to protect household incomes during the height of the coronavirus pandemic, will be cut.

New analysis shows that once the cut is introduced, the incomes of low- to-middle income families will fall by £1,040 a year. When added to previous benefits squeezes over the last decade, it estimates their average annual benefit income loss will rise by 140 per cent to nearly £1,800 a year.

The research into the impact of the reduction to the benefit on a sole-earner family with two children, reveals that nursery assistants will be among those worst affected, losing an average of £1,797 a year, while teaching assistants will lose slightly more at £1,803 a year.

The figures are based upon an average salary of £18,069 for a nursery assistant and £17,904 a year for a teaching assistant.

Parents working as hairdressers will be the worst off however, losing an average of £1,982 a year

Carried out by the Child Poverty Action Group on behalf of Action for Children, the research examines the importance of the increase in mitigating the damage caused by social security losses over the previous decade for a ‘typical’ working family.

Around 3.4 million children are living in households that claim Universal Credit, according to the latest statistics from the Department for Work and Pensions.

‘The cut is a recipe for disaster for struggling families’

Action for Children is urging the Government to rethink its plans to cut universal credit.

Director of policy and campaigns Imran Hussain said, ‘We welcome the Government’s levelling-up agenda, but you can’t level up the country by pushing down the living standards of some of the hardest working families in the country.

‘The cut is a recipe for disaster for struggling families and clashes with the end of the furlough scheme when more parents will be at risk of losing their jobs, the extra costs of the school term and a rise in energy bills as we head into the colder months.’

A Government spokesperson said, 'As announced by the Chancellor at the Budget, the uplift to universal credit was always temporary. It was designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and it has done so.

'Universal credit will continue to provide vital support for those both in and out of work and it’s right that the Government should focus on our Plan for Jobs, supporting people back into work and supporting those already employed to progress and earn more.'

• Action for Children has today launched a new campaign, ‘Star in Every Child’, which asks the public to break down the barriers that stop children from reaching their full potential and help a vulnerable child shine. Find out more at actionforchildren.org.uk/star