YMCA St Paul’s Group research into government figures today reveals the true extent of potential damage to some of the most vulnerable among the 918,000* young people currently claiming Universal Credit if the £20 a week uplift is removed on 6 October.
For a young person leaving supported accommodation and relying on Universal Credit, there are typically three housing options: social, shared or one-bedroom accommodation. While the current uplift provides more opportunity to find the best fit for each individual, after that £20 is removed the only viable option for many young people is shared housing – an option often not suited to those with complex lives.
Looking at specific samples of young people living in Hammersmith and Fulham, Ealing, Hillingdon, Kingston Upon Thames, Merton, Richmond upon Thames and Waltham Forest, YMCA St Paul’s Group found that after rent and bills those living in social housing would see their money drop from £167 to £80; and similarly cut from £266 to £179 for those in a house-share setting. This loss to finances means the difference between generating debt and breaking even, with these figures not taking into account necessities like travel, food and prescriptions.**
When looking at the end of the uplift in relation to employment, government thinking suggests that its removal would inspire a spike in those looking to secure work, however figures for those aged 16-to-24 suggest a high uptake already. More than a third (38%) of 16-to-24-year-olds claiming Universal Credit are employed, with the employment rate in this age range rising significantly between April and June 2021.
What is clear from YMCA research is the stark difference the uplift makes in relation to earnings once bare essentials and daily costs are considered, with young people on low income typically finding themselves priced out of anything past necessity. And for those on Universal Credit and not in employment, affording even essential items after rent and bills can already lead to shortfalls, often meaning financial arrears, reliance on food banks or even skipping meals. Once the £20 uplift is removed, many more young people in this situation risk being pushed beyond the breadline and even further into debt.
YMCA St Paul’s Group is asking the Government to consider other ways to help young people at this crucial stage of life:
- The Universal Credit lower (under 25) rates should not be applied if young people live along.
- Young people who have lived in supported accommodation for six months or more to be entitled to the ‘work allowance’ for Universal Credit payments, so they can earn more before tapering occurs to help them create and maintain their independence.
- Commission a review of the caps placed on young people’s benefits in comparison to the actual cost of living.
Richard James, Chief Executive of YMCA St Paul’s Group, said:
“For many vulnerable 16-to-24-year-olds across London, the uplift means that their vital monthly lifeline of £257 – which is already lower than their 25+ counterparts – is boosted significantly by £87 at a critical time in their lives.
“By removing the uplift, the choices a young person has when moving out of supported housing narrows dramatically, impacting the type of accommodation they move in to, access to employment opportunities, and how much money – if any – they have left after covering necessities.”
“While YMCA St Paul’s Group appreciates that difficult decisions must be made in order to support the economic recovery of the country after a truly traumatic time, the removal of this lifeline is not a feasible or a fair decision.
“Therefore, YMCA St Paul’s Group is asking the Government to maintain the £20 weekly uplift to ensure young people striving for independent living are able to find the best possible fit while pursuing a career or learning opportunities – without an increased risk of falling into debt. The choice should never be one or the other.”
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Notes to Editors
*Department for Work and Pensions, Universal Credit data tables, 17 August 2021
** Area-specific examples in England and Wales are available on request
*** These figures are after transport to work costs have been taken into account
YMCA analysed a range of government datasets to understand how affordable living independently was for those who have lived in supported housing, whether currently in work or not, and how much less so this will become after the uplift is withdrawn on 6 October.
This report examines the choices a young person has when they move out of supported housing: the type of accommodation they move in to, the impact of working on their income and how much money they have after paying for necessary items.