Demand for advice on rent arrears in Scotland has rocketed by 47 per cent over the past five years, a report has warned, driven by changes to the social security system such as the roll-out of Universal Credit.
The report by Citizens Advice Scotland (CAS) said that the steep increase in rent arrears “coincided closely” with changes to the social security system, particularly the advent of UK government welfare reform since 2010.
The roll-out of Universal Credit, which will replace six existing benefits including Child Tax Credit, housing benefit and income support, has been beset with problems and was paused earlier this week by the UK government.
Today’s report into the causes and consequences of rent arrears found that almost one-quarter of those living in rented accommodation have experienced rent arrears in the past five years. Just under half of social rented tenants and 36 per cent of private rented sector tenants said they were finding it difficult to manage financially, compared with 15 per cent of owner occupiers.
It said that the most common ways of handling falling behind on rental payments was to borrow money from friends and family, take on debt on a credit card or cut back on essentials.
CAS spokesman Rob Gowans said: “The rise in rent arrears is one of the most worrying trends we see across the CAB network at the moment. While there are a number of factors driving this, we have no doubt that the flaws in Universal Credit are one of the main ones.
“For the past 18 months we have been calling for a halt and fix to Universal Credit. Some welcome changes have been made but many of the problems still remain and this report shows the impact these are having on peoples’ lives.”
Mr Gowans said that other causes of rent arrears include rent increases, low wages and lack of support for those in need.
He said: “We have set out again today the key flaws that need to be addressed, including reducing the waiting period before payment, cutting out processing delays and reducing deductions. These are relatively simple changes that could make a huge difference to millions of people.”
The report recommends that the UK government should reduce how long people have to wait for their first Universal Credit payment. In particular, it said, consideration should be given to a single, additional, non-refundable Assessment Payment being introduced for new Universal Credit claimants to avoid hardship being caused by having no income for at least five weeks.
It said the Scottish and UK governments should also continue to raise awareness of the availability of Universal Credit Scottish Choices for people who would find having their housing costs paid directly to their landlord helpful in managing their finances.