It is extraordinarily expensive to be poor. The less money you have, the more expensive many things are likely to cost. Those with the lowest incomes are often forced to access electricity and gas via prepaid meters – forking out hundreds of pounds more annually than those who pay by direct debit.

And when your income is only just enough to cover your basic living costs, even modest unexpected outgoings can push you into debt. New school shoes, perhaps. Or a train ticket to visit a hospitalised elderly parent. The situation is even scarier with larger buys. What are you supposed to do if you live in a rural area and your car breaks down – borrow the money to fix it, or risk losing your job because the patchy local bus service won’t get you in on time?

Not all debt is the same, of course. The more affluent you are, the more likely it is you’ll be able to access credit at low interest rates. Doorstop lenders and extortionate BrightHouse-style rent-to-own companies target poorer customers because they are the least likely to have other options. Eye-watering annual percentage rates mean debts can quickly spiral out of control. Even initially enticing 0% credit cards can catch you out if you fail to keep up with minimum payments. And if you’re barely bringing in enough to cover rent, food and bills, finding that regular extra income can be a struggle.

In recent years, government policy has only exacerbated the situation. The household benefit cap arbitrarily reduces the means-tested housing benefit households receive to bring their total welfare income below a figure that seems to have been plucked from thin air. Most of those affected are families with young kids, including single parents who are not legally expected to look for work because they have children under the age of three. There are reports of people racking up unmanageable debts trying to keep their heads above water, and of families going into rent arrears and eventually losing their homes.

Universal credit has been similarly disastrous for households struggling to make ends meet. It’s hard to understand why the system was designed with a six-week wait before the first payment (recently reduced to five weeks) until you consider the financial circumstances of those who created it. If you have the kind of income that allows you to put away money for a rainy day, waiting an extra few weeks to be paid is no big deal. Perhaps it genuinely didn’t occur to them that many universal credit recipients would be in a much tougher situation. The alternative is that homelessness and crippling debt are being inflicted deliberately, in an act of apparent sadism.

Quick Guide What is universal credit and what are the problems? Show What is universal credit? Universal credit (UC) is the supposed flagship reform of the benefits system, rolling together six benefits into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the system and increase the incentives for people to move off benefits into work. About 2 million people are currently in receipt of UC. More than 6 million will be on the benefit by the time it is fully rolled out. How long has it been around? The project was legislated for in 2011 under the auspices of its most vocal champion, Conservative MP Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults mean it is now seven years behind schedule, and rollout will not be complete until 2024. The government admitted that the delay was caused in part by claimants being too scared to sign up to the new benefit. What is the biggest problem? The original design set out a minimum 42-day wait for a first payment to claimants when they moved to UC (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears and evictions, hunger (food banks in UC areas report notable increases in referrals), use of expensive credit and mental distress. Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. Housing benefit will now continue for an extra two weeks after the start of a UC claim. However, critics say the five-week wait is still too long and want it reduced to two or three weeks. Are there other problems? Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean UC is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move to UC, reducing work incentives.

Landlords are worried that the level of rent arrears accrued by tenants on UC could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access.

And there is concern that UC cannot deliver key promises: a critical study found it does not deliver savings, cannot prove it gets more people into work, and has plunged vulnerable claimants into hardship.

Zero-hours contracts and the gig economy are also a major cause of financial hardship. One McDonald’s worker I spoke to recently explained how her fluctuating hours made claiming housing benefit all but impossible, and left her unsure whether she’d be able to make rent from one month to the next. She ended up being evicted from her temporary accommodation with just 24 hours’ notice, forcing her to move with her son into her mother’s already overcrowded house. Because she needed to arrange after-school childcare in advance, she had to find money for the full week even if she had only been given a couple of days’ shifts.

Thousands of households face similar struggles. In many circumstances, borrowing money is the only option, even if you’re not sure how you’ll manage to pay it back. It’s hardly surprising, then, that one in four of Britain’s poorest households are falling behind with debt payments or spending more than a quarter of their monthly income on repayments. The findings of a report released today by the Institute for Fiscal Studies, on behalf of the Joseph Rowntree Foundation, shouldn’t come as a surprise to the government – but perhaps it might push them to act.

Instead of patronisingly offering “free budgeting support” for people struggling as a result of universal credit cuts and delays, they should recognise that falling into unmanageable debt is often the product of impossible circumstances – not simply a personal failing. Rent-to-buy and other high-cost forms of credit should be capped, as payday loans were two years ago. Universal credit should be either fixed or abandoned, and nobody should be left stranded while they wait for delated payments. Efforts should be made to eradicate zero-hours contracts, perhaps by legally mandating that overtime be paid at a higher rate than scheduled hours. The welfare cap should be scrapped; building more social housing is an alternative method of bringing down the housing benefit bill.

Food, adequate housing and other essentials should be recognised as universal rights. The current situation – where people are forced into crippling debt trying to sustain themselves and their families – is a genuine moral catastrophe.

• Abi Wilkinson is a freelance journalist