Universal Credit: £20 cut slashes food budgets by 50%

Supermarket aisle with empty green trolley

The government has cut £20 per week from Universal Credit by removing the uplift brought in to help people at the start of the pandemic. And now, rising prices and energy bills will result in many families struggling to manage on £80 less each month.

The cut affects people who are unlikely to have savings. The result is that these people are at risk of getting further into debt or going without the basics.

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Universal Credit and food budgets

Families and individuals with no disposable income can only cut back on essentials. Money spent on groceries is the most flexible of essential costs. Therefore, food budgets on Universal Credit will be drastically reduced.

The £20 per week reduction in Universal Credit represents around half the grocery bill for the poorest households. According to the Office for National Statistics, pre-pandemic those on the lowest incomes were spending between £35 and £48 per week on food and non-alcoholic drinks. This includes households with children.

On incomes of £228 per week, the average spend at the supermarket in the financial year ending 2020 was £41.30. This was before the rising inflation that we are experiencing now. 

With gaps in supermarket shelves, it’s hard to stick to a budget when the usual low price staples are missing. 

Criticism of the Universal Credit cut

The Joseph Rowntree Foundation has warned that more than five million families will lose the equivalent of £1,040 per year starting from this October. And an estimated 200,000 children will be ‘swept’ into poverty. 

The Trussell Trust has explained that the cut in Universal Credit will mean parents skipping meals and the heating being switched off in more than a million family homes. Citizens Advice has urged the government to think again before removing the lifeline from Universal Credit as energy prices soar. 

Working but can’t afford the basics

It’s not just Universal Credit that is being reduced. People who receive Working Tax Credit to top up inadequate earnings are also feeling the pinch of a similar drop in income. And with Universal Credit replacing Housing Benefit, Rishi Sunak is risking more vulnerable people facing rent arrears by pressing ahead with removing the uplift. 

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How to survive on £20 less Universal Credit

If you’re on Universal Credit, you probably already know how to cut corners. You’re probably already spending as little as possible. Saving pennies will help, but not fix a big hole in your budget.

Here are a few dos and don’ts.

Do

  • Ask for help from friends and family. You may not want to ask for money, but you could share a meal. 
  • Think of your food budget as a fixed cost, even it is is small. 
  • Ditch your debts. Speak to a debt advisor and consider your options. You may be eligible for a Debt Relief Order that will wipe the slate clean with no more repayments. 
  • Buy yourself a very small treat every week if you can.
  • Get a big pot of multivitamins and minerals and take them regularly.

Don’t

  • Cut back on healthy food. This will have an impact on your long-term wellbeing. 
  • Blame yourself for the situation you’re facing. 
  • Rely entirely on supermarkets. Instead, grow your own, use the Olio and Too Good to Go food sharing apps and shop at local market stalls for fruit and veg. 
  • Use up any savings before cutting back on spending.

The post Universal Credit: £20 cut slashes food budgets by 50% appeared first on The Motley Fool UK.

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