Crisis issues stark warning that cutting Universal Credit by £20 a week could drive thousands struggling with arrears into homelessness

New analysis of UK Government data by the national homelessness charity Crisis has revealed that in England over 100,000 low-income renters on Universal Credit will be at least two or more months behind on their rent when the planned £20 cut comes next week, raising fears that thousands will be at risk of being pushed into homelessness as they struggle to keep their heads above water.

The cut, which will see people on Universal Credit lose an average of £87 per month or the equivalent of £1,040 over a year, will hit struggling households amid rapidly soaring energy prices, a freeze on housing benefit which isn’t keeping up with rising rents in most parts of the country and the possibility of further redundancies in the wake of the Government’s furlough scheme ending today.

Currently, thousands are under incredible pressure to keep a roof over their head. With the eviction ban in England now over and notice periods as low as just four weeks for those with four or more months of arrears, Crisis is warning that a further drop in income could lead to a surge in homelessness unless the £20 cut is reversed.

Jon Sparkes, Crisis Chief Executive, said: “For many struggling renters this cut could be the final blow that forces them from their homes. 
 
“We know that when people have somewhere stable to live, they are in a better position to find work, build their careers and contribute to the economy as it re-opens. Taking this vital lifeline away risks undermining all of this.  
 
“If we are truly serious about levelling up the country and rebuilding our economy so it works for everyone, then the UK Government must change course and keep the £20 uplift so that people don’t needlessly lose their homes this winter and we have a fighting chance at recovery.  
 
“The UK Government assured people they would not lose their home because of the crisis; we must not fail them now.”  

-Ends- 

 Notes to editor: 

• Calculations are based on data from the Household Resilience Study: Wave 2 (published April 2021). The 100,000 figure describes the number of households on universal credit in England who were in two or more months of arrears during November-December 2020 (the period covered by the data); given that these households typically do not have any savings to draw on, we assume that household arrears have not been resolved. The figure does not take account of households who were in arrears of shorter length or who have since entered rent arrears, meaning that this figure should be taken as a lower bound. 
• Housing Benefit rates (and the housing costs component of Universal Credit) have been frozen since April this year. This means the rents are no longer linked to market rents, at a time when families and individuals up and down the country continue to struggle with the economic impact of the pandemic.  
• From the 1st June 2021 until the 30th September 2021 the UK Government announced that anyone served a section 21 notice in England would need to be given a notice period of at least four months. From the 1st October 2021 the notice periods are expected to reduce again to two months' notice for a section 21, which was the required period before the pandemic. For tenants in arrears, from the 1st August 2021 landlords only have to give a minimum notice period of two months for arrears less than four months. For arrears four months and over, the notice period drops to four weeks.