Written evidence from Young Women’s Trust [UCW0064]

1. About Young Women’s Trust
    

1.1.       Young Women's Trust is a feminist organisation working with young women to achieve economic justice.

1.2.       Our vision is one where young women have the freedom to choose work that fosters their talents and are paid fair wages in secure workplaces. And all society prospers because young women’s contribution is valued.

1.3.       Our mission is to give economic power to young women by firing their imaginations and aspirations and raising their voices, by challenging sexist work roles that trap young women in poverty and rebuilding workplaces free from discrimination and inequality.

1.4.       All quotes in this response are taken from a survey of young women carried out between 3 and 17 of April and have been anonymised.

2. Key Recommendations relating to welfare payment
    

2.1.       Ensure Universal Credit is accessible by all, in a timely way by:
 

• Removing the five-week wait to receive payments by making advance payments in the form of grants rather than loans
• Overhauling administrative support so that people aren’t queuing on phones or online and those without digital access can still get support quickly
• Suspending sanctions

2.2.       Increase protections for those most at risk of financial hardship by ensuring benefits for people of all ages are paid at the rate of at least the National Living Wage (£322.64) for a full-time worker. This should include:
 

• Universal Credit
• Employment Support Allowance
• Personal Independence Payment
• Carers Allowance
• Statutory Sick Pay
   

2.3.       Ensure support is available to the most vulnerable families by:

• Making furlough the default position for groups including parents unable to secure childcare and those on zero hours contracts unless employers can demonstrate why they are unable to furlough staff. This should include a requirement for employers to report on the number of staff they have furloughed alongside reasons for any decision not to furlough staff members.
• Ensuring food vouchers for those who would otherwise receive Free School Meals are at a level sufficient for them to buy the food they need
• Guaranteeing access to healthcare for refugee and migrant women can access healthcare - ending the policy of “no recourse to public funds” and suspending charges for maternity services.
   

2.4.       Make provisions for emerging from the current crisis by:

• Investing in welfare support to tackle the likely increase in redundancies
• Ensuring young women are supported to pay off to write off debts incurred due to the crisis
• Covering upfront costs for childcare under universal credit

2.5.       Ensure the welfare system takes account of the increased risks of domestic abuse by guaranteeing financial independence

3. Summary of this response
    

3.1.       Even before the coronavirus crisis, the five-week wait for Universal Credit was pushing young women into financial hardship; forcing them to make choices between paying rent and feeding themselves or their families. One in four young women already skipped meals every day due to financial pressures and more than four in ten were facing a regular struggle to make their money last all month.
 

3.2.       Young women told us that that they were increasingly relying on foodbank or ever-increasing levels of debt to bridge the gap. This was further exacerbated by the lack of upfront support for childcare under Universal Credit meaning that for many they were unable to choose to return to paid employment without suffering dire financial consequences.
 

3.3.       The coronavirus crisis has deepened crisis young women already faced. They have been disproportionately affected they have taken time off work due to illness, self-isolation or as carers for others. The people who already contribute £140 billion a year to the economy through unpaid work have taken on even more unpaid work as nurseries and schools have closed and family members need extra care. We call on the government to urgently invest in carers.
 

3.4.       Young women were already more likely to be in precarious, unprotected contracts and dependent on a dysfunctional benefits system that faces ever greater demand, especially amidst a crisis thar has seen claims for Universal Credit soar to record levels. We call on the government to urgently overhaul Universal Credit and extend a work safety net to ensure those who are already economically vulnerable are not plunged into even greater hardship

4. Young women facing financial challenges
    

“I have been struggling to make rent as my salary only just covered it before the crisis, so with the reduction I have had to go into overdraft in order to pay.”  

4.1.       Even before the current crisis young women were disproportionately like to be facing financial difficulties. Many were struggling to make ends meet and making impossible choices, accepting mounting debts, skipping meals or relying on foodbank. Our research has found that:
 

• Almost 40 per cent of young women were facing a “real struggle” to make their cash last until end of month[1].
• Over half of young mums (51 per cent) were struggling to get by month-on-month.
• Two thirds (67 per cent) of young mums said they were struggling or just about managing to cope financially, rising to 82 percent for those who are not working
• One in three young women did not believe they will not they will be free of personal debt by the time they are 40
   

4.2.       The five- week wait for Universal Credit was often a critical point at which debts began to increase and young women faced additional stress and anxiety. Advance payments helped to relieve the initial pressure but repayment of the advance left young women continually playing catch-up meaning debts simply increased again at a later date.
 

5. Financial costs of Universal Credit

“I am awaiting my first UC payment since I stopped working just before the crisis. [This] has left me with no money to buy essentials and [with shortages] I have to buy-more expensive brands”

Young Women also had very poor experiences of Universal Credit. Moving to Universal Credit from legacy benefits has left many worse off financially. Additionally, the five-week wait and the lack of upfront support for childcare costs has added financial pressure and prevented young women from taking up paid employment. Our research has found that:
 

• Two thirds of single parents under 25 faced reductions in benefit income as a result of moving to Universal Credit[2]
• One in four mums under 25 were skipping meals every day to make ends meet rising to on in three those relying on Universal Credit[3]
• Almost two thirds (64 per cent) of young mums on Universal Credit missed meals at least once a week
• 64 per cent of those claiming Universal Credit had been unable to take up childcare places due to upfront costs with the same number saying they had been unable to take up work due to childcare costs

It is clear that, in addition to addressing the five-week wait, the government must also take steps to ensure that other costs young women face, such as childcare payments (including deposits) are paid upfront. The current system whereby claimants have to pay the costs themselves and claim back through Universal Credit leaves young women struggling financially and unable to move into paid employment.
 

6. Impact of coronavirus
    

6.1.  Rising demand for Universal Credit

“I am a waitress at a small family-owned restaurant and I am worried I won’t have a job to go back to after the crisis. I know I will be in debt when the crisis is over, and if I cannot get my job back I am worried about making rent and buying food.”
 

6.1.1. The coronavirus pandemic and the measures taken by the government to contain virus have had an enormous impact on the financial capability of young women. Demand for claiming Universal Credit has soared to record levels with 950,000 applying between 16 March and 2 April. [4] With predictions that the economy could take a long time to recover, these numbers could be dwarfed by a surge in claims as redundancies and lay-offs rise in the wake of the crisis. Past recessions have hit young women especially hard and the government must invest in welfare that invests in the talents of young people and creates jobs.
 

6.1.2. Despite an increase in the individual allowance the level of Universal Credit is still low whilst the two-child limit of child benefit penalises larger families. The welfare system should be sufficient to ensure that people are not plunged into poverty by circumstances outside their control. Young women are disproportionately likely to be in in zero hours contracts with 560,000 women working under such arrangements zero hours contracts between October – December 2019 compared to 414,000 men.[5] We propose that benefit payments are increased to at least the level of the national living wage (£322.54 a week).
 

6.2.  Increasing levels of debt

“I believe it has already impacted us, mental health wise and financially. [It] will be a long battle to get out of the debt and personal issues this has already and will more cause.”
 

6.2.1. As the country looks ahead to easing lock down, we can expect further challenges that the welfare system must address urgently. For example, many young women were already holding high levels of debt before the crisis. Whilst repayments may have paused, they face higher repayment levels once the crisis is over.
 

6.2.2. In addition, increased uncertainty and rising prices in the face of shortages have forced young women to take on additional debt. One in ten say that have had to rely on overdrafts or credit cards to plug gaps in income during the crisis. At a time when bank overdraft charges have risen significantly this is of particularly concern. Young women face higher interest payments and a lack of available credit through standard channels also leaves them vulnerable to unscrupulous lenders. This will put them under huge financial pressures as their welfare payments are used to service existing debt rather than pay for essentials. In the past young women on Universal Credit say moving into work is often a point at which creditors increase pressure for repayments, making them worse off, in contrary to better-off calculations made by JCP staff. As we emerge from the crisis support must be maintained to enable young women to tackle or write off their existing debt.
 

6.3.  Cost and availability of childcare

“[Nursery fees] were £20 then a week upfront costs which was like £170. I had £200 on Universal Credit so all of that went on the nursery”
 

6.3.1. Furthermore, it highly likely that many childcare providers will close as a result of the economic fallout of the crisis. Young women already tell us the lack of suitable childcare prevents them working. The impact of the crisis will mean less childcare is available and costs may rise. This must be reflected both in levels of childcare support given to claimants (which should increase above the current level of 85 per cent) to cover childcare costs and the requirements to return to work included the claimant commitments where lack of childcare is a mitigating factor.
 

6.4.  Young women have told us in the past that the requirement to pay deposits and other costs upfront for childcare has made it impossible for them to return to work. Their resources are likely to be even more severely limited as the crisis lifts, making support for deposits and upfront childcare costs especially important.
 

6.5.  Rising levels of domestic abuse

“I wanted to leave an unhappy relationship which has been abusive at times. However, the lockdown has made it much harder for me to leave. And now I don’t know what to do.”

It has been well-documented that that self-isolation measures have led to an increase in the level of abuse.  The National Domestic Abuse Helpline reported a 25% increase in calls and online requests for help since the lockdown. There was already a severe shortage of refuge beds prior to this crisis because it was difficult for women to find affordable housing and move out of refuge. This problem has been exacerbated by the lock down. Those experiencing physical abuse must be provided with adequate welfare support to allow them to live and work independently.
 

6.5.1.     Universal credit functions at a household level, meaning those experiencing economic abuse face increasing levels of financial control and, as claims for Universal Credit increase both during and beyond the initial phases of the crisis, the welfare system must respond to protect the financial independence of those women at risk and provide a viable pathway out of abusive situations.

April 2020