Around 474,000 people claimed Universal Credit in Scotland last month. This is an increase of over 70% since the beginning of the coronavirus lockdown in March, and yet another indication of how hard the ongoing pandemic is hitting peoples’ pockets.
What is Universal Credit?
Universal Credit is a payment made monthly to people who are struggling with their living costs. People who apply for Universal Credit are usually in low-income jobs, or out of work completely, and need the extra financial support in order to get by.
The Universal Credit payment is usually sent to a person’s bank account once a month, although in Scotland it may be sent twice per month, which reduces the amount of time individuals have to wait until their next payment.
Universal Credit was designed to replace a number of existing benefits in the UK, including Child Tax Credit, Housing Benefit, Income Support, and income-based Jobseeker’s Allowance (JSA).
What was the level of Universal Credit claimants before?
In 2019, the number of people claiming Universal Credit in Scotland was in the low tens of thousands. The average monthly number of claimants in Scotland last year was 20,000.
Since the beginning of this year, figures have started to climb. Figures released by the Scottish Government at the time showed the number of people claiming Universal Credit in Scotland jumped from 20,000 a month in 2019 to over 110,000 between March 1st and April 7th this year.
While those figures were hugely worrying at the time, now, less than seven months later, has more than quadrupled to nearly half a million.
What has caused the recent surge in Universal Credit claims?
While there could be any number of reasons why a person might apply for Universal Credit, the surge in applications has coincided at every point with rising cases of the coronavirus, and the lockdowns called in response to the virus.
With all hospitality venues, like pubs, restaurants and cafes, shut for over three months from March this year, many people working in the hospitality industry were placed on the furlough scheme, meaning a cut to their income of an initial 20%.
For those who were out of work when the lockdown began, casual jobs in bars, restaurants, and tourism – which might previously have been seen as easier to pick up – were no longer available, leaving them no choice but to turn to benefits.
Given that the number of Universal Credit claimants in Scotland has now almost doubled since the virus hit, it’s hard to avoid the conclusion that the effects of the coronavirus pandemic – and subsequent lockdowns – are now being reflected in people’s finances.
Is the rise in Universal Credit claims likely to continue?
Whether the surge in Universal Credit claims continues into the New Year depends on how the country copes with the virus over the long winter months.
Scotland has recently been placed under new coronavirus restrictions in an attempt to reduce transmission of the virus and quell a second wave. Many hospitality venues have been forced to close, as with the nationwide lockdown in the spring, and people are being warned not to use public transport unless absolutely necessary.
That, coupled with the fact that the UK Government is wrapping up the Job Retention Scheme (furlough) in October, means many people in Scotland whose jobs have been impacted by the virus won’t be receiving the same level of financial support.
There’s every chance the number of Universal Credit claimants will continue to climb.
Am I eligible for Universal Credit?
With so many people struggling to make ends meet as we battle against a global pandemic, it makes sense to double-check whether you are eligible for extra financial support.
Because it’s a Government benefit, you need to meet certain criteria in order to qualify for Universal Credit. You might be eligible for Universal Credit if you:
- Live in the United Kingdom
- Are in a low income job, or are out of work entirely
- Are 18 or over (although in certain circumstances you can qualify for the benefit if you’re 16 or 17)
- Are under state pension age (or your partner is)
- Have less than £16,000 total in savings between yourself and your partner
If you do not meet the criteria to qualify for Universal Credit, you can visit the Government website and use the benefits calculator to find out which benefits you might qualify for instead.
How do I get help with my finances?
If you are living in Scotland and worried about your finances, Carrington Dean is Scotland’s leading provider of formal debt solutions.
With over 70 years of experience in the financial sector, we can offer you free advice and guidance, whether it’s about your application for universal credit, or tips on how to make your money go further during hard times.
