The think-tank carried out in-depth interviews and discussion groups with low-income parents in Oldham, Brighton and London. ?
Parents told researchers that the proposed move from weekly or fortnightly to monthly payments would leave them further at risk of debt at the end of each month, once Universal Credit is introduced.
Among parents surveyed for the report, eight out of ten said they would run out of money before the end of the month if payments were handed out monthly.
Only half of all employees that earn under £10,000 annually receive a monthly pay packet. The report, Sink or Swim: the Impact of the Universal Credit, argued that there is little evidence that moving to a monthly system of benefits payments would better prepare people for work.
The report also said that plans to give social housing tenants the money for rent payments directly could increase families' risk of eviction and falling behind with rent.
Social Market Foundation deputy director Nigel Keohane said: “By moving to a single monthly payment for all benefits, the government is removing the markers and aids that families currently rely on to budget effectively.”
The government has proposed a so-called “exceptions policy” to arrange alternative payment schedules for vulnerable claimants. But the Social Market Foundation said many people could still be missed.
The think-tank is calling on government to permit families to opt into a flexible payment system, which allows them to determine the frequency of payments to suit their needs.
Fiona Weir, chief executive of single parents charity Gingerbread, said the move to a monthly budget would be a “huge adjustment” for many single parents.
“We are concerned that, without the right information and support before and during the move to Universal Credit payments, some single parents will run out of money before the end of the month,” she explained.
“The government must make clear what it will do to ensure that single parents and all claimants are supported throughout this transition, for example providing grants to cover shortfalls, rather than leaving them at the mercy of payday loan companies.”
A Department for Work and Pensions spokeswoman defended the move to monthly payments.
She said: “Universal Credit will be paid monthly because most people in work are paid that way and the system should help people get used to the patterns of working life.
"But we will make sure that no one falls through the cracks, and we are working with local authorities and the financial industry on how best to support individuals. We have always said we would be flexible with people who might struggle to manage their money.”
