3 million on UC won’t get penny more
WHAT BUDGET MEANS FOR YOU
BUDGET changes mean two million people receiving Universal Credit have been thrown a lifeline – but leaves almost three million more in a “dark hole”.
It has placed many losing the £20-a-week pandemic uplift feeling desperate, as if ministers who make these decisions have no idea what it is like to struggle financially. Rishi Sunak said the UC “taper rate” of tax will be cut from 63p to 55p, meaning claimants will keep more of the money they earn above the threshold. It is set to be introduced by December. Workers are allowed to earn while claiming UC but for each pound they are paid above the “work allowance”, 63p is taken back, so the benefit tapers off with increased income. Mr Sunak also said the work allowance will be raised by £500 a year. Around 1.9 million working families are likely to be better off as a result of the changes.
Mr Sunak, who was slammed when he ended the £20 a week uplift three weeks ago, left the taper tax announcement to the end of his Budget speech – the traditional rabbit-out-of-a-hat moment – because 8p in the pound was more than had been predicted. But it has emerged that over half of the 5.8 million people on UC, including those who cannot work due to illness, will not get a penny more.
And on average the Budget leaves the poorest fifth of households £280 a year worse off, according to the Resolution Foundation, a think-tank trying to improve living standards.
The Budget left single mum Caroline Rice, a registered childminder, feeling like she is still trapped in a financial “dark hole”.
Caroline, 47, who is taking part in Covid Realities, a Nuffield foundation research programme about life on a low income, said: “I can’t see that this Budget is going to help me in any way. What I may gain from the cut in the taper rate has gone on the
massive energy bills and food costs.” Caroline, from County Fermanagh, added: “The people making these decisions are paying £20 for a steak, so they think it is OK to cut that from my household, but that’s a week’s groceries for me.
“They don’t know how hard it is on a tight budget. Two years ago I never had any debt, now I feel like I’m chasing my tail the whole time.
“The strain mentally is exhausting. The heating is going to be my biggest struggle over the winter.”
Single mum and nursery nurse Symone McKitty-Smith, 30, from Manchester, said the 59p minimum wage increase is not enough.
She added: “How are we supposed to give our children a good life when we are struggling to pay our bills?”
Some business owners fear the wage rise will lead to redundancies as they recover from the pandemic.
Sharon Birch, 56, who owns a nursery in Hartlepool, Co Durham, may have to take on another job to afford to keep her staff in work.
She said: “We are outstanding, but the money is horrendous. I earn much less than £15 an hour myself.”
While 80-year-old David, who lives in sheltered accommodation in the Midlands, said: “As far as I can see, there wasn’t anything at all [in the Budget] for pensioners.”