Chapter 2: HL box impact of UC

'The five weeks wait for the first payment encourages borrowing and helps create and perpetuate a cycle of debt. People have to borrow just to get by during that period, and then their ongoing payments are lower to repay what they borrowed, which means they can't budget properly to cover the costs of their outgoings, so they are incentivised to borrow more. On top of that, direct deductions from people's UC can often leave them with next to nothing to live on'.

An example is a client who was left with £94 to last a month after deductions, the equivalent of £3 per day. Furthermore, paying the housing element, which is essentially a subsidy for landlords, direct to claimants instead of their landlord is suboptimal. If someone who has no money receives their housing element and they have to choose between paying their rent with it, or buying food, or putting their gas or electric on, or buying essentials for their children, they are forced to make an impossible choice.