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Flaws in social security system are driving problem debt, charity says

A report from StepChange Debt Charity, has found half of its clients claiming benefits meet the definition of “destitute”.

People are considerd destitute if they have lacked two or more of six essentials over the past month because they cannot afford them.This includes accommodation, having two meals a day, being able to heat and light your home, having clothing and footwear appropriate for the weather, and basic toiletries.


National polling shows that 25 percent of those receiving Universal Credit are in problem debt.


Further data reveals that one in ten of those surveyed said that they had used a loan shark as a result of a problem linked to social security. In total, 43 percent of those using social security had used credit to pay for essentials over the past year which is a key risk factor in developing further debt problems.


Other common causes of problems include unaffordable deductions from benefits to repay debt and design features of the Universal Credit system including the five-week wait.


StepChange says the government should make certain changes to “debt-proof” Universal Credit such as ending the five-week wait and allowing people to choose whether to receive their support monthly or more frequently.


Peter Tutton, head of policy at StepChange, said: “There is an urgent need to rethink the way that Universal Credit and legacy benefits can help people recover from financial difficulties instead of making those problems worse.”

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