Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment her Department has made of recent trends in the average levels of household debt for people in receipt of universal credit.

Claimants may find themselves in debt for a variety of reasons, many of which can pre-date their claim to Universal Credit. The Department encourages people out of work, or on a low income, to consider whether claiming Universal Credit could provide them with additional support before issues, such as debt, spiral out of control. We promote Universal Credit through various external channels, including through the ‘Understanding Universal Credit’ website, to help people navigate the range of support available and provide information about how to apply.

Work Coaches are trained to gauge claimants’ financial needs from their first contact and can refer them to more specialist support for personal budgeting, money guidance and debt advice if required, including through the Money and Pensions Service (MaPS). MaPS has a statutory responsibility to deliver free and impartial money and pensions guidance and debt advice to anyone that needs it. It is also required to have regard to the needs of people in vulnerable circumstances.

Our own analysis shows that Universal Credit in fact reduces debts such as rent arrears. Supporting research carried out by the National Federation of ALMOs, shows over three quarters of their tenants come onto Universal Credit with pre-existing rent arrears. It also shows that arrears tend to increase prior to making a claim for Universal Credit, and that Universal Credit actually appears to be helping to clear arrears over time.