Money Box
Working on Benefits and Banking Hubs
Oct 26, 2024
In this insightful discussion, Dan Whitworth, a reporter specializing in Universal Credit, highlights a report urging the government to raise earning thresholds for benefits that support working families. Charles Randell, of the Financial Inclusion Committee, advocates for banking hubs to provide crucial assistance to communities hit by branch closures. Helen Thornley addresses potential tax changes in the upcoming budget, discussing implications for savers. They also touch on rising energy prices, offering listeners key financial strategies to navigate these challenges.
24:38
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Quick takeaways
- The current Universal Credit structure discourages low-income families from earning more due to the punitive loss of essential benefits like free school meals.
- Banking hubs are becoming crucial for communities after bank branch closures, yet they need to enhance fraud assistance and digital support services for vulnerable individuals.
Deep dives
Impact of Universal Credit on Working Families
The current structure of Universal Credit presents significant challenges for low-income families, exemplified by the case of a widowed mother who risks losing essential benefits by earning more. When her income surpasses certain thresholds, she loses access to free school meals and prescriptions for her children. This creates a disincentive to work longer hours, as she would end up worse off financially despite her increased labor. The threshold for free school meals stands at an annual income of £7,400, and exceeding it can drastically reduce her financial support, highlighting the punitive nature of this benefit system.
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