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Nearly two thirds of families on Universal Credit forced into lockdown debt ‘nightmare’


London, UK | 17 June 2020 | Save the Children

  • Large-scale survey of families finds six in 10 families on Universal Credit and Child Tax Credits have been forced to borrow money since start of crisis – with many relying on payday loans or credit cards
  • To support up to 4 million families and 8 million children, JRF and Save the Children call on government to extend an urgent lifeline for families in the form of a £20 a week increase to the Child Element of Universal Credit and Child Tax Credit
  • 70% of families have had to cut back on food and other essentials, while half have fallen behind on rent or other household bills, sparking fears of more hardship ahead if unemployment rises further

Nearly two thirds of hard-pressed families on Universal Credit are borrowing money to stay afloat during the Covid-19 emergency, new research by the Joseph Rowntree Foundation (JRF) and Save the Children reveals.

The survey found 86 per cent of those with children on Universal Credit or Child Tax Credits have faced extra household costs owing to the pandemic. Half of all those surveyed say they are behind on rent or other essential bills.

Income losses and the additional costs of lockdown have put increased pressure on already overstretched family budgets: 70% of families surveyed said they have had to cut back on food and other essentials, while 60% of families on Universal Credit or Child Tax Credit have been forced to borrow money including using payday loans or credit cards.

Struggling to put food on the table or money on the electricity meter is having a negative impact on parents’ mental health: two-thirds of those surveyed reported that concerns about money had affected their mental health with around a quarter reporting a severe impact.

Parents with children who were caught in poverty pre-crisis are around 50% more likely to have lost their jobs than parents who were better off, and the long-term effects on childhood and family life could be significant.

Barbara and her husband Harry, who have one daughter and care full-time for their 11-year-old grandson, started receiving Universal Credit after Harry fell ill with Coronavirus and was unable to work.

Financially, it’s just a nightmare. After the bills are paid and you’ve got the food in, there’s just no money left. There’s just no money,” Barbara said.

You’re getting people calling and asking why your bills haven’t been paid, and you just don’t have the money. It’s stressful when you’ve gone years and years always paying your bills, and then all of a sudden you can’t pay them.

It’s the children that suffer. There are certain basics that children need, and if they need a new pair of shoes or something it means taking out a loan – and then you’re getting deeper into debt.”

Save the Children and JRF are calling for an urgent, temporary lifeline for families in the form of a £20 per week increase to the child element of Universal Credit and Child Tax Credit, to minimise the long-term impact of the crisis on children. This is equivalent to £2.85 per child, per day: enough to cover a child’s breakfast and lunch or to buy books and toys so children can play and learn.

Modelling by JRF shows that this would help keep up to 4 million families afloat and provide direct support for 8 million children.

Helen Barnard, Acting Director of the independent Joseph Rowntree Foundation said:

“The coronavirus crisis has shown us that as a compassionate society we want to support each other and protect each other from harm. As well as individuals performing extraordinary acts of public service, we have also seen the government intervening to protect jobs and to boost social security as a lifeline for millions of families.

“It’s vital that we build on this to ensure that the pressures on families with children in particular are recognised and acted on. Families are dealing with high costs with children at home and many simply haven’t got the income they need to weather the storm. This is taking a major toll on parents’ mental and physical health and damaging family life during an intense period for everyone.

“Providing an urgent uplift of £20 per week to families with children claiming Universal Credit or Child Tax Credits can keep many from being pulled into poverty, especially where parents have lost work as a result of the pandemic.

“By taking action now, we can ensure that the human suffering of this tragic pandemic is not compounded by rising child poverty, damaging life chances and holding a generation back in  the years to come.”

Dan Paskins, Director of UK Impact at Save the Children, said:

“Life at the moment is especially hard for families forced to make impossible choices about whether to put food on the table or money in the electricity meter. A £20 a week increase will give families with children the lifeline they need to pull them through these difficult times.

“Every child should have the toys and books they need to learn and play. They shouldn’t have to worry because their parents are struggling with low pay, insufficient benefits, fear of losing their job, debt and rising costs.” 

The Department for Work and Pensions (DWP) has received more than 2.3 million new applications from families for Universal Credit since the beginning of the crisis. Prior to the crisis, 2.6 million families were on Universal Credit, of which almost 1.2 million were families with children.


For more information contact:

Charlotte Rose, Media Manager, Save the Children

media@savethechildren.org.uk / 0203 763 1247 / 07831650409 (out of hours)

Harriet Anderson, Media Manager, Joseph Rowntree Foundation

pressoffice@jrf.org.uk / 07929363024


  • Opinium conducted a survey of 3,105 parents of children under 18, claiming either Universal Credit or Child Tax Credit for Save the Children during late May and early June 2020.
  • Figures showing the number of families and children who would be helped by the proposed uplift to the child element of Universal Credit and Child Tax Credit are drawn from analysis carried out by JRF and using a model devised by IPPR
  • Figures showing the likelihood of unemployment for families in poverty pre-crisis are based on new economic modelling by JRF. This uses UKMOD, data from the Family Resources Survey modified to reflect the current economic situation, and macroeconomic estimates from NIESR
  • Figures on the number of families receiving Universal Credit are available from the Department for Work and Pensions Stat-Explore website: https://stat-xplore.dwp.gov.uk/webapi/jsf/login.xhtml
  • Figures on the number of new applications for Universal Credit since the crisis are available from the Department for Work and Pensions management information tables: https://www.gov.uk/government/publications/universal-credit-declarations-claims-and-advances-management-information
  • 65% of families on Universal Credit reported having borrowed from some source since the start of the crisis. Overall, 60% of families receiving either Universal Credit or Child Tax Credit reported this.

About JRF

The Joseph Rowntree Foundation (JRF) is an independent social change organisation whose vision is for a prosperous and poverty-free UK. We are working to build the public and political will to solve poverty. We believe that people with direct experience of poverty should be at the heart of our influencing efforts and the design of effective solutions to poverty.

During this pandemic reduced incomes and higher living costs have tested many families resources. While families are reeling from the effects of lockdown, it’s simply not right that children should have to face the additional worry of feeling hungry or being evicted.

In response to the COVID-19 outbreak we’ve funded a programme of community level responses and are advocating for change in partnership with people experiencing poverty.

About Save the Children

Save the Children exists to make sure every child can fulfil their potential and change the world for good. We help children survive and thrive, so they can go on to build a better future. Save the Children’s work in the UK focuses on tackling poverty during children’s earliest years, as the roots of some of the deepest educational and social divides lie in these critical first few years. In response to the COVID-19 outbreak, we have launched an Emergency Grants Programme and educational support for children in poverty in the UK, as well as responding at a global scale.

Find out more about our work