More than one in ten people in Southwark were on universal credit ahead of the cut earlier this month.
Nearly 42,000 Southwark residents were claiming the benefit, which was brought back down by £20 per week on October 6 after the government increased pay-outs during the Covid-19 pandemic. Labour politicians and poverty researchers have warned this could make it hard for some people to put food on the table this winter.
Among the people affected are long-term Bermondsey resident and recently bereaved widow Jane, who wanted her name to be changed. Jane’s husband of 45 years died earlier this year. He was chronically ill and had been claiming employment and support allowance, which covered their expenses as a household.
Jane, who also has a number of health conditions that mean she cannot work, went onto universal credit and said she wasn’t told about the cut to come – which means she will get about £324 per month, instead of about £411.
“I had to ask, they didn’t tell me,” she said. “I thought – ‘how am I going to manage on that?’ I’m still paying out the same, apart from what [my husband] ate. Everything’s the same apart from the money.
“I’m lucky I’ve got family to support me. Some people have got no one.” Despite her conditions, she volunteers at a local food bank, helping take deliveries to vulnerable families on her estate.
Jane said she is suffering from depression. “It’s only coming out of me now about my husband,” she said, and the worry over universal credit is not helping. Charity the Health Foundation said that the cut could exacerbate the difference between areas where people already have poor mental and physical health on average, and more prosperous parts of the country.
The drop in universal credit comes at the same time as the end of the furlough scheme and when food prices and heating bills are set to rise. Inflation is likely to go up by 4 per cent, according to the Bank of England. All this means many families will face a “very difficult winter”, according to business minister Kwasi Kwarteng.
London Assembly Member for Southwark and Lambeth Marina Ahmad called on the government to do more to help vulnerable people faced with this combination of problems – including bringing universal credit back to pandemic levels and boosting other benefits.
“I am really concerned that it is going to be a very difficult winter for many low-income and vulnerable households in Southwark, who could struggle to afford to put the heating on, or enough food on the table,” she said.
“Thousands in our community have been hit by the cut to universal credit and the end of the furlough scheme. On top of this, we are facing increasing energy bills and food prices.
“The Government simply must do more to stop people from falling below the poverty line. As a start, Ministers should use the upcoming Spending Review to raise the minimum wage, so it is line with the real London Living Wage of £10.85 per hour.
“The safety net also needs to be strengthened, with the universal credit uplift reinstated and local housing allowance increased to cover average rents.
“Our economic recovery cannot be built upon so many in our community being levelled down”.
It comes as landlords warned that the cut to universal credit could send claimants into arrears. The National Residential Landlords Association said that the government should end the five-week wait for people claiming their first month’s payment, to help keep people in the black.
The Department for Work and Pensions, which manages the benefits programme, has defended the decision, saying that the increase in universal credit was always intended to be temporary.
A spokesperson added: “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.”