Universal Credit…How will it affect me?

What is Universal Credit?

It’s a single payment to replace six existing benefits. It was designed to simplify the UK welfare system and make claiming benefits easier, but has been affected by delays and controversies.


Which benefits are being replaced?

We’ll be waving goodbye to Child Tax Credit, Housing Benefit, Income Support, Jobseeker’s Allowance, Employment and Support Allowance and Working Tax Credit.


Who can apply?

In most cases you have to be aged 18 or over and not in full-time education to apply for Universal Credit.


But surely “universal” includes everybody?

Good point. Some people aged 16 and 17 can apply, including those estranged from their parents and not under local authority care, and those who are responsible for a child. Some students in full-time education are eligible, too. It’s best to check the Universal Credit website for full details.


How will this affect me?

The major change is that most single people aged 18 to 21 will no longer be able to claim housing benefits, and will have to apply for training or work placements after six months of receiving payments. Homeless charities have criticised the new policy, arguing that scrapping housing benefits for young people removes a vital safety net.


What do I need to do?

If Universal Credit has reached your area and you meet the criteria, you have no choice but to switch if you want to claim benefits. In addition to meeting the age criteria, you have to be on a low income or unemployed and have savings of less than £16,000. The new system is being rolled out at Jobcentres across the country over several years; type your postcode into the Citizens Advice website to see if it’s reached your neck of the woods.


Why it is taking so long? I need a payment now.

It’s fair to say that the scheme hasn’t gone to plan. People moving onto Universal Credit are having to wait at least six weeks before getting their first payment (although this is due to reduce by a week as per 2017 budget), which goes direct into their bank account. It can be as long as two months. If this affects you and you won’t have enough cash to get by, you can apply for a single government loan called an “advance payment” – ask at your Universal Credit interview or phone the helpline (0345 600 0723). Some people have complained that since the process is carried out entirely online, it puts people without access to the internet at risk.


So apart from using the internet, any other skills necessary?

Money management. Getting a single monthly payment rather than weekly or fortnightly payments requires you to pay close attention to your spending, especially since changes to housing benefits mean you will now need to pay your landlord yourself. So if you don’t already, now is the time to start budgeting.

If you’re worried about making your money last until your next payment, find out about how to set up an emergency fund to get you through.

Find out more about Universal Credit in the 2017 Autumn Budget.

More information