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The new "Fair Repayment Rate" for those in debt on Universal Credit is a welcome change - Save the Children statement

LONDON, 30 October 2024 - Save the Children responds to the Chancellor Rachel Reeves' announcement at the Autumn Budget of a new Fair Repayment Rate to reduce the level of debt repayments that can be taken from a household’s Universal Credit income each month. The reduction will be from 25% to 15% of a Universal Credit standard allowance payment. 

Ruth Talbot, policy and advocacy advisor at Save the Children UK, said: 
"The rate at which some of the poorest families in the UK have been required to pay back debt to the UK Government was utterly unfair and unsustainable. We welcome this announcement as a first step, as we know it will have a significant impact for families and put more money in their pockets for food, toys, clothes and books.

"The next step to solving the problem of debt for those on Universal Credit would be removing the five week wait for claimants to get their first payment. To bridge that gap, families get an advance payment from the DWP, which they must then pay back. Scrap the five week wait and families will no longer be immediately saddled with government debt when they are in desperate need of support."

 

Additional information: 

  • Around 700,000 of the poorest families with children will benefit as a result of this policy change at the Budget. 
 
  • In some of the UK's most economically disadvantaged regions, two-thirds of children in households in receipt of Univeral Credit are pushed deeper into poverty due to these deductions.

 

  • The change the Chancellor has announced could see single parents receive up to £39 more of their entitlement each month. For two-parent families this could be up to £62.
 
  • Advance payments taken out to cover the five week wait for the first Universal Credit payment account for 45% of the debt deductions parents face.
 
  • For more information please contact media@savethechildren.org.