Food or heat? The impossible decision for homeless young people following the £20 Universal Credit cut

Executive summary

In March 2020, the Universal Credit (UC) and Working Tax Credit entitlement was increased by £20 a week; this was a temporary measure to help claimants financially during the COVID-19 pandemic. In March 2021, this was extended for a further six months, up until October 2021. Despite widespread calls from Centrepoint and others in the sector to make the uplift permanent, the Government chose to withdraw the extra money, impacting millions of vulnerable households across the country.

Thanks to generous funding from abrdn Financial Fairness Trust, Centrepoint carried out research into the impact of this reduction in UC on homeless young people. Insight from frontline staff, alongside 117 survey responses from Centrepoint colleagues and our partner organisations across England and Wales, reveal the devastating consequences the cut is having on vulnerable young people as they are forced to choose between having enough food to eat, heating their home and paying their rent.

Recommendations

• Introduce a new Youth Independence Payment of £16.06 per week for young people living independently without family support. This would raise their overall Universal Credit entitlement to the rate that over 25s receive in recognition that they face the same living costs.
• Proactively offer all under-25s (making a claim for Universal Credit) budgeting support and advice, either delivered by the DWP or through partnerships with local providers.
• More support to be provided to young people living independently to protect them from fuel poverty. Although the Warm Home Discount Scheme has been expanded by the Government ahead of the energy price hike in April 2022, it is still administered by electricity suppliers who decide who can get the discount and the number of discounts available are limited. As such, vulnerable young people may be unable to access this support.