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Debt charity warns benefit cuts will see claimants sink further into poverty


By Alan Beresford

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A NEW report by a national debt help charity has claimed the social security system is locking many people in poverty.

CAP National Director for Scotland Emma Jackson. Picture: CAP
CAP National Director for Scotland Emma Jackson. Picture: CAP

Christians Against Poverty (CAP) Scotland has released the Shipshape or Sinking Ship? report which uses academic indicators to assess people’s financial and mental wellbeing.

This report looks at how the social security system is trapping many people in poverty, and highlights the need to keep the £20 a week Universal Credit uplift – a lifeline due to be cut by the UK government in October.

Speaking about the report, CAP Scotland’s National Director, Emma Jackson, said: “The easing of Covid-19 restrictions doesn’t mean an end to the impact it’s having on people’s personal finances.

"With all the challenges families across Scotland have been facing, many will be carrying forward the financial impact for years to come in the form of household debt.

“The UK government is planning to make one of the biggest overnight cuts in history, by reducing Universal Credit and Tax Credit claimants' money by £20 a week and continuing to ignore those on legacy benefits.

“The Shipshape or Sinking Ship? report has found that the social security system is already a major driver of deficit budgets and lower wellbeing, and the UK government is about to make the problem so much worse by cutting benefits like Universal Credit.

"Removing £20 a week from claimants at this stage is equivalent to destroying the lifeboats on a sinking ship, leaving those aboard desperately fighting for survival – we fully expect this action to result in a sharp rise in debt and poverty and undo the positive impact of the Scottish Child Payment for families with young children.

“We have so much to gain from giving people the resources they need to achieve high levels of wellbeing. High financial and mental wellbeing contribute to improving communities and help boost the economy. Helping people improve their wellbeing results in them feeling in control, confident and optimistic about the future. Which, in turn, leads to more jobseekers finding employment, more positive and active communities and a stronger economy in Scotland and the UK as a whole.

“Across the UK, CAP clients with an income of less than £900 per month had an average financial wellbeing score of just 42 out of 100 and a mental wellbeing score of 19 out of 35, the UK average score being 26. Removing another £87 a month from Universal Credit claimants’ incomes will push those affected into further debt and poverty, and have a significant impact on their financial and mental wellbeing.

“The planned cut to Universal Credit is significant because two in five (40 per cent) CAP clients in receipt of this benefit receive less than £900 of income a month, meaning a monthly reduction of £87 is equivalent to removing 10 per cent of their total income.”

She added that the charity were asking both the UK government and MPs from all sides to "do the right thing" and retain the uplift.



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