In a recent report conducted by The New Economics Foundation one in three people will be living in hardship by May despite the universal Credit Working Tax Credit £20 uplift hopefully being extended.
The New Economics Foundation also reports that 21.7 million people will still not have a decent standard of living even if the uplift is extended.
The report goes on to say that 12.9 million of the people in financial difficulty will be receiving less than 75% of the Minimum Income Standard which is defined as being £19,200 for a single person and £37,400 for a family of four, taking into account if the £20 uplift is removed.
If removed this will result in 1.1 million more people falling below the MIS by May compared with last September.
If the Covid 19 infection and mortality rates lessen it will expose the true crisis in living standards that thousands of people are forced to live in.
The New Economics Foundation report shows that by May, one in three people which is estimated to be total of 21.7 million will be living in families with not enough income to meet every day needs.
Despite the furlough scheme, unemployment has continued to rise over the last year. According to the latest government data it shows that unemployment has increased by 1.3% points higher than the previous year. It also also shows the largest annual decrease in employment since the aftermath of the financial crisis. This being half a million fewer people employed than there was last year. Redundancy rates have also risen from 8.4 per thousand on the year, to 12.3 per thousand employees.
This leaves millions of people that are now dependant upon our social security system to support incomes, help with housing costs and to feed people.
At the time of writing the latest government data reveals there are 5.9 million people on universal credit with 3 million receiving housing benefit, 2.5 million receiving personal independence payment, 1.9 million receiving employment support allowance, 1.4 million receiving disability living allowance, and 0.3 million receiving jobseeker’s allowance.
If the furlough scheme ends in April, the financial situation is set to worsen for many therefore making them more dependent upon the social security system.
The Bank of England has also projected that unemployment will rise to 7.8% in April-June 2021.
Although the government is likely to extend the £20 uplift for another six months, it is unknown if it will be withdrawn after six months.
To withdraw the uplift would not only push people deeper into poverty it will also hamper financial recovery for the lowest income families. If the uplift is withdrawn November there will be an estimated additional 1.2 million people living below the Minimum Income Standard.
At the very least the £20 uplift must be kept for those on universal credit or receiving working tax credit and it must be extended to those on legacy benefits who do not currently have access to it. To take it away in November would prevent any financial recovery for people having the incomes across the country.
We need a social security system that gives financial security for all and doesn’t make people choose between eating or heating and paying the rent ensuring that no one has to choose between buying the basics or heating their homes.
To do this there need what remains of the the UK’s safety net to be a reformation of the current social security system giving it the ability to protect individuals and families for the long term.
The very act of giving Universal Credit and Working Tax Credit claimants the £20 uplift and introducing the furlough scheme was actually the government’s way of recognising that our current social security safety net isn’t good enough.
We need to continue to campaign for a fairer social security system for all.
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