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News Article

Universal Credit starts in the North West today - but nearly half of us don't know what it is

Published 29 April 2013 by

Do you know what Universal Credit is? Do you know who it will affect and how it will affect them?

If you don't know, you're not alone. Recent research by thinkmoney showed that 48% of people in North West England don't actually know what Universal Credit is - despite it being introduced in Ashton-under-Lyne today. Claimants in Ashton-under-Lyne are the first in the country to receive this benefit, but eventually it's expected to affect around six million people.

Elsewhere in the UK, awareness is not much better, with 47% unaware of what Universal Credit is. thinkmoney has put this guide together to help raise awareness of Universal Credit and how it will affect people.

What is Universal Credit?

Universal Credit is one payment that will replace several different benefits. These benefits are income-related Employment Support Allowance, income-related Jobseeker's Allowance, Income Support (this includes support for mortgage interest too), Child Tax Credits, Working Tax Credits and Housing Benefit.

To start with, only 'new claimants' will receive Universal Credit instead of these benefits.

When will I receive Universal Credit?

Universal Credit is being trialled for new claimants in Ashton-under-Lyne from today onwards.

New claimants in other parts of the country are expected to be put on Universal Credit between October 2013 and March 2014.

All benefit recipients (not just new claimants) should be put onto Universal Credit within the next four years.

Why are all these benefits being replaced by Universal Credit?

Benefits are currently paid fortnightly or weekly. Universal Credit is one single monthly payment - like a salary. The idea is to replace "a complex set of payments with one simple payment" and help people "get ready for the world of work".

How to budget on Universal Credit

For some, having fortnightly and weekly payments replaced by a monthly payment may make it more difficult to budget each month. Plus, Housing Benefit will now be paid to the claimant instead of directly to the landlord - so people will need to factor this into their budgets too.

If you think you might need help with your budgeting on Universal Credit, the thinkmoney Personal Account is worth considering. It comes with a built-in budgeting service that makes sure enough of your money is put aside for bills and other important payments each month (like your housing payments). Any leftover money in the account goes to you to spend however you like, without worrying about affecting your essential monthly commitments.