Written evidence from 38 Degrees [UCW0052]

Foreword

This consultation submission is based on the views of 95,151 members of the public who are calling on the government to scrap the five week wait for all Universal Credit claimants. It also provides a summary of the responses of 3,712 Universal Credit claimants, who were recently surveyed by 38 Degrees about their experience of Universal Credit. The full survey results have been submitted to the committee as a password protected csv. Please contact us for the password.

38 Degrees is an online campaigning organisation, made up of millions of people from every corner of the UK. We help people make their voices heard on issues they care about, so that they can make a difference in the country and in their local areas.

38 Degrees welcomes the committee’s call for evidence on the issue of the five week wait for Universal Credit payments. If you would be interested in finding out more about 38 Degrees generally, or this consultation submission in particular, please contact Holly Maltby, Campaigns Manager.

Executive Summary

“The five week wait period was very stressful. I was left with no money for basic items such as food and wasn’t able to pay my bills on time; leaving me with council tax debt”  - Loana, from Wolverhamptom

“I am paying my advance back leaving me with £50 a week to live on. Once I’ve paid everything I have to, I have nothing left for food ” - Shelia, from Merseyside

95,151 members of the public have signed a petition calling on the government to scrap the five week wait for Universal Credit, by making the advance payment a grant not a loan. The petition was set up on 1st April by Stefan, a member of the public who made a claim for Universal Credit when his freelance work dried up due to coronavirus. At the time this submission was sent to the committee he was still waiting for his first Universal Credit payment. The level of public engagement in Stefan’s campaign highlights the public appetite for change and the growing scale of the problem. You can see the live petition at: https://38d.gs/5weekwait

38 Degrees surveyed members of the public, asking them to share their experiences of accessing Universal Credit. The results illustrate the difficulties that both the five week wait and the advance payment pose for Universal Credit claimants. The survey responses reflect the experiences of 3,712 claimants, 55.3% (2,052) of whom started claiming Universal Credit due to coronavirus, and 44.7% (1660) who were already claiming Universal Credit prior to coronavirus.The responses show that:

●        Only 18% of respondents who reported not taking an advance payment did so because they didn’t need one.

●        The majority of respondents who did not take an advance payment did so because they were either: worried about getting into debt (33.3%), or didn’t know they could receive an advance payment (29.1%).

●        For those that chose not to take an advance payment, many reported not being able to pay rent, bills or afford daily essentials whilst waiting for their first Universal Credit payment.

●        Respondents who took an advance payment often reported being left without enough money in future months whilst they paid back the loan.
 

Since the coronavirus outbreak, more than 1.6 million people have made claims for Universal Credit. However, outside the volume of new claims, coronavirus is not creating brand new issues for the system. Rather, the crisis is shining a light on a problem that campaigners and claimants already know about Universal Credit; people in desperate need of money are being left stranded or forced into debt whilst they wait five weeks for their first Universal Credit payment.

The full results are included below.

Methodology

●        The survey from which these results were drawn was sent to 1.3 million people across the UK.

●        Of those that responded, 3,712 people reported that they were currently claiming, or trying to claim, Universal Credit.

●        This is not a scientific poll. Not all questions were mandatory and the people who took part self-selected.

●        This report provides a summary of responses gathered between 15.04.20 and 16.04.20. The full survey results have also been sent to the committee.

Results

Which of the following best describes you?

Of the 3,712 respondents, 55.3% (2,052) started claiming Universal Credit due to coronavirus and 44.7% (1660) were already claiming Universal Credit prior to coronavirus. The following results reflect the experiences of both new and old claimants.

If you asked for an advance payment, how long did you have to wait to be paid?

Of the 1,374 people that reported asking for an advance payment, 65.5% (901) of respondents received their advance payment within 3 working days, this suggests that in most cases, the advance payment is providing an immediate safety net it was designed for. However for a significant minority, it is not. 13.7% (188) of respondents reported waiting more than three working days, with a further 20.9% (285) still waiting for their advance payment.

If you didn’t ask for an advance payment, why was that?

It is often assumed that if an advance payment isn’t requested by a claimant, they have enough money to pay for basic essentials until the first Universal Credit payment five weeks later. The take up rate of advance payments is therefore sometimes used to suggest that (a) people don’t need money immediately and can afford to wait for five weeks and (b) that having the advance payment as an option solves the issue of the five week waiting period.

However, the majority of claimants who responded to this question did not take out an advance payment because they were either: worried about getting into debt (33.3%), or didn’t know they could receive an advance payment (29.1%). Only 18.5% of respondents didn’t take an advance payment because they didn’t need it.

Please write in a few sentences about what the five week wait before your first Universal Credit payment will mean or has meant for you and your household?

For those that are taking out an advance payment, the loan is having a severe impact on people's mental health, and leaving many without enough money in future months whilst they are paying back the loan. For those that didn’t take out an advance payment, many are left struggling to pay for rent, bills and daily essentials before their first payment comes in five weeks later. Below is a small selection of testimonials. Hundreds more people have shared how this will affect them and these testimonials are in the accompanying CSV.

“I was in crisis and incurred credit card debt which I am still attempting to pay off” - Emma, from Bath, started claiming benefits because of the coronavirus outbreak and didn’t know they could receive an advance payment

“It will mean our family will not have enough to survive on.” - Frances, from London, started claiming benefits because of the coronavirus outbreak and didn’t take out an advance loan as they were worried about getting into debt

“We have been living on very little food, trying to ration it so it lasts.” - Sarah, from Luton, started claiming benefits because of the coronavirus outbreak and didn’t know they could receive an advance payment

“I had to make a 4 mile round trip on foot to a food bank.” - Brian, from London, was already claiming benefits when the coronavirus outbreak started

“We will get by day to day on the last bit of my partner's earnings from the last job he did, after that we can try to borrow from friends. Bills and car will go unpaid. Food will be our only outgoing” - Joanna, from Bridgwater, started claiming benefits because of the coronavirus outbreak

“Won’t be able to pay rent for the first time in my life” - Junior, from London, started claiming benefits because of the coronavirus outbreak and didn’t take out an advance loan as they were worried about getting into debt

“We don't even know how much we can have until five weeks after applying so we don’t know if it is enough to cover our bills until it’s too late” - Tracey, from Clacton-on-Sea, started claiming benefits because of the coronavirus outbreak and didn’t take out an advance loan as they were worried about getting into debt
 

“All the household bills have not been paid and we have spent a significant amount of time contacting companies asking to defer payments“ - Shelli, from London, started claiming benefits because of the coronavirus outbreak and didn’t take out an advance loan as they were worried about getting into debt

“It's caused us to fall behind on April's rent and council tax, which I have no idea how we will recover from and how we can repay this debt.” - Sarah, from Buckhaven, started claiming benefits because of the coronavirus outbreak

Summary

The petition and survey responses laid out in this submission illustrate that both those claiming Universal Credit and the wider public, want the government to scrap the five week wait for all Universal Credit claimants, by making the advance payment a grant not a loan.

The advance payment does not provide a solution to the problem of the five week wait for the first Universal Credit payment. Many claimants will choose not to take the advance payment for fear of getting into debt; and for those that do take the advance payment, the monthly loan repayments often leave them without enough money to pay for bills and food.

As hundreds of thousands people move onto Universal Credit as a result of the coronavirus crisis, more and more people are starting to understand first-hand how the five week wait for a first payment results in severe anxiety, debt and trips to the local food bank. It’s time to end the five week wait and turn the advance payment into a grant, rather than a loan.

About 38 Degrees

Who we are

38 Degrees puts power in more people's hands. We are made up of millions of people across the UK who come from all walks of life, from farmers in Aberdeenshire to nurses in Cornwall. The millions of us who take part in campaigns come from very different backgrounds, voted differently in the EU referendum and vote for all political parties and none, but we all agree that politics works better when more of us get involved.

We have small office teams in London and Edinburgh, but it’s when thousands of us come together that we make real change happen.

What we do

38 Degrees provides people with more ways to make their voices heard on issues they care about. From signing petitions and emailing our representatives, to crowdfunding groundbreaking research and meeting politicians face to face, together, we make sure we’re heard. We run campaigns to make Britain a better and fairer place to live - and we make a difference, from saving local libraries, to tackling plastic pollution and standing up for our NHS so that it can care for generations to come.

Why do we exist

We believe democracy is about more than voting every five years. 38 Degrees uses technology to make it easier for people to contact politicians and companies, and to hold them to account. We want people to feel like politics doesn’t happen to them, but that they are part of the process.

Who funds us

We are completely independent, funded by tens of thousands of small donations from people who have taken part in our campaigns.

April 2020