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More than 500,000 children are living in families in debt to the Department for Work and Pensions (DWP), according to new figures highlighting the scale of the benefit debt trap.
at least 800,000 families on universal credit Money is being deducted from their monthly payments to repay Loan Data obtained by Citizens Advice shows it helped them avoid the five-week wait until they receive their first benefit.
Figures released under the Freedom of Information Act show that overall 13 percent universal credit family They are forced to take loans from DWP to meet their needs.
Analysis by Citizens Advice shows that more than 500,000 children are in families who owe debts to the government, with an estimated £143 million taken back from them last year.
Joining forces with campaigners and politicians, the charity has called on Chancellor Rachel Reeves to convert loans into grants in her upcoming budget to end the “debt trap”.
Tina, from Kent, had to wait four weeks for a transfer from Employment Support Allowance (ESA) to UC. The experience had been “terrible”, she said, leaving her with just £3.75 and leaving her mental health deteriorating.
“I want to pay the upcoming bills before the debt gets too big. I want to buy fresh food. I want to put some money on my gas and electricity. But I can’t do that,” she said.
“I sit here one evening and think, ‘No, I’m not going to turn on the lights.’ Even my phone won’t last long, but I don’t have money to order a new cable. I got £13 for turning my electricity on. How long will this last with me?”
Tina, who did not want to use her last name, is now £240 in debt and relies on a community café for food and support. She is receiving advice from Christians Against Poverty (CAP) debt coach, with the charity describing the five-week delay to the first Universal Credit payment as “devastating”.
Under the existing rules, loans are offered by job trainers to claimants for a period of five weeks until the first payment. The size of the loan is usually the full value of the individual’s Universal Credit entitlement.
If they accept, it is later deducted from their monthly Universal Credit payment – leaving many families struggling to afford their most basic living costs on the low payment.
The Labor MP for Liverpool Riverside, Kim Johnson MP, is Launched a campaign to eliminate the two-child benefit limitSaid: “Once again, we see the government passing the cost of its broken welfare system onto the families who can least afford it.
“Forcing people to take out loans to avoid the five-week wait for Universal Credit is trapping hundreds of thousands of children in poverty and pushing parents into debt and using food banks. These loans must be turned into grants in the Autumn Budget. Ministers can no longer ignore the human cost of this policy.”
Dame Claire Moriarty, chief executive of Citizens Advice, said: “The five-week wait for Universal Credit is forcing many families into debt to the government before they even receive their first payment. We’re helping parents who rely on food banks because of it. Universal Credit was meant to provide a safety net, not trap people in debt from day one.”
He urged Ms. reeves Calling for her upcoming autumn budget to be used to “replace these damaging loans with grants”, she added: “No family should have to borrow money just to eat while waiting for the support they are entitled to.”
Children’s Commissioner, Dame Rachel de Souza, said: “As families struggle with rising costs, these figures show that many are being forced to make difficult decisions to provide for their children, leaving almost one million families trapped in a perpetual cycle of debt as they wait up to five weeks for their first Universal Credit payment.”
He urged the government to “be ambitious” in its new child poverty strategy and supported the call Eliminate the two-child benefit limit.
Stewart McCulloch, chief executive of the charity Christians Against Poverty (CAP), backed calls for the loans to be converted into grants. He said: “This five-week wait is not a glitch: it is built into the system, forcing new claimants to survive for more than a month without any income or start their claim in debt.”
The latest Freedom of Information data is from February 2025, but the numbers remain almost the same each month, meaning they represent the current number of households in debt.
A DWP spokesperson said: “Advances are not loans and therefore no interest is charged, nor are any enforcement actions taken. They are available to new and existing customers who need immediate support.
“We are reviewing Universal Credit to ensure it is doing the job we want it to. We are committed to considering how we can support people during the initial assessment period before receiving their first payment as part of the review, often known as a 5-week wait, and will provide an update in due course.”