The expansion of Universal Credit is “a disaster waiting to happen”, Citizens Advice has warned.
The charity said an accelerated rollout of the benefit will only push more people into debt despite the good intentions behind its introduction.
Universal Credit is replacing Jobseeker’s Allowance, Employment and Support Allowance, Income Support, working and child tax credit and Housing Benefit with a monthly payment that gradually decreases as your earnings increase.
The government says it is helping people move into jobs faster and stay in work longer, and wants to speed-up the rollout from five areas a month to 50 after October.
A study of 50,000 Citizens Advice cases shows that 79% of people on Universal Credit have priority debts putting them at a high risk of eviction, visits from bailiffs, being cut off from energy supplies or even prison.
This is compared to 69% of those on legacy benefits such as Jobseekers Allowance or Housing Benefit.
Similarly, 41% of debt clients on Universal Credit have no spare income to pay creditors compared to 33% on legacy benefits.
A previous report by Citizens Advice showed that 39% of claimants were waiting more than the six weeks it should take for first payment, with 11% waiting more than 10 weeks.
More than half (57%) have had to borrow money while waiting for their first payment and while 27% have received an ‘advance payment’ to tide them over, a further 40% didn’t even know this help was available.
Citizens Advice is calling for the rollout of Universal Credit to be paused while its problems are fixed, and for the government to ensure no-one has to wait longer than six weeks for a payment.
Gillian Guy, the charity’s CEO, said: “The roll-out of Universal Credit is a disaster waiting to happen.
“While the principles behind Universal Credit are sound, our evidence shows that if the government continues to take this stubborn approach to the expansion of Universal Credit, it risks pushing thousands of families into a spiral of debt, and placing an even greater strain on public services.
“People face severe consequences – like visits from bailiffs and eviction – when they can’t pay their bills.
“But government can help protect these households by taking the simple step of pausing Universal Credit and fixing the underlying problems, so families are less likely to fall into arrears.”
Speaking in April, when the government reduced the rate at which a Universal Credit payment reduces as a claimant starts work, Damian Green, then secretary of state for work and pensions, said: "Creating a welfare system that rewards work is central to our plan to build a fairer Britain for all.
"We want everyone to be able to get on and support their families. That’s why through Universal Credit, when people start work they keep more of every pound they earn.
"This complements the support that work coaches are already offering to help people progress in their jobs, to take on more hours and earn more money, by making sure it always pays to be in work."