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Citizens Advice Scotland warns of “perfect storm” as inflation hits benefit claimants

21 July 2022

New research by Citizens Advice Scotland (CAS) warns that people are faced with a “perfect storm” of soaring prices and flat or falling incomes, which risks sweeping tens of thousands of people into  poverty, problem debt, and destitution.

Recent data from across the Citizens Advice network in Scotland shows that:

  • advice need for food banks has grown by almost a third (31%) since September 2021.
  • advice need for other charitable support, including fuel bank referrals, saw a sharp increase of 23% between September 2021 and December 2021, likely reflecting the additional pressure of winter heating bills.
  • advice on universal credit sanctions has grown by 53% over 2021-22.
  • advice on universal credit Budgeting Advances has risen by 25% over 2021-22.
  • advice on universal credit overpayments nearly doubled from the average across 2020/21 to Q4 of 2021/22.

CAS concludes that “a wider review of the adequacy of our social security system is urgently needed to ensure everyone can make ends meet, no matter the cost of living.”

In addition, CAS recommends:

  • an immediate uprating of universal credit and all legacy benefits to present inflation rates and a continuous review of the adequacy of social security payments to ensure they meet everyone’s needs
  • suspending the use of sanctions until the cost of living crisis is over
  • scrapping the benefit cap and the two-child limit
  • pausing collection of all DWP and HMRC debts and reducing all other deductions to a 5% maximum until the DWP’s debt recovery process can be replaced with a revised system based on a robust holistic affordability check, such as the Common Financial Statement
  • abolishing the five week wait by converting all Advance Payments at the beginning of universal credit claims into non-repayable assessment period grants

DR UK’s Welfare Rights and Policy Adviser said: “The CAS report is a reminder that universal credit is failing across the UK and that UK wide sweeping reform is needed.

“Disabled people now make up nearly half of the most deprived working-age adults in the country.

“Years of below-inflation uprating have left the value of all social security entitlements trailing far behind the cost of living, with benefits only uprated by 3.1% in April 2022.

“This has left people on universal credit with a huge gap between their incomes and their bills.

A one off Cost of Living Payment is welcome but one off payments are not enough to end the cost of living crisis.

As a minimum, an increase to all benefits in line with the true level of inflation needs to be made urgently.”

The Perfect Storm: Living on Universal Credit during the Cost of Living Crisis is available from cas.org.uk.

See also our related news story More than six in ten referred to a food bank are Disabled people.