Workers on Universal Credit up 130% since pandemic

New TUC analysis shows a big rise in the number of workers claiming Universal Credit as it calls for more to be done to address the cost of living crisis.

Rising Costs

 

The number of workers on Universal Credit has increased by 1.3 million since the eve of the Covid-19 pandemic, according to TUC analysis.

The analysis of official statistics shows that over 2.3 million workers were in receipt of UC at the end of 2021, compared to just over one million on the eve of the pandemic in February 2020.

This represents an increase of 130 per cent over the last two years and means one in 14 (7.2 per cent) working adults now claim UC.

The TUC says the huge rise in UC recipients has been driven by working households being pushed into financial hardship during Covid, with millions facing a cost-of-living crunch this year.

The TUC says that the basic value of UC is now lower than at the start of the pandemic as a result of UC not keeping up with inflation.

TUC estimates show that the value of UC has fallen by £12 a month in real terms when measured against CPI inflation and £21 a month when measured against RPI inflation compared to just before the pandemic (February 2020).

The TUC says this trend will only get worse in the months ahead with inflation forecast to rise further.  It warns that millions of low-paid families face a crunch point in April when energy bills and national insurance contributions go up – at the same time as UC continues to fall in value.

Its polling shows one in eight workers (12 per cent) say they will struggle to afford the basics in the next six months. And a fifth of working people (22 per cent) say they’ll struggle to afford more than the basics. Low-paid workers are more likely to be struggling. One in six (17 per cent) low-paid workers (those earning less than £15,000 a year) say they will struggle to afford basics in the next six months, and three in 10 (29 per cent) say they’ll struggle to afford more than the basics.

Parents of young children, disabled workers, key workers and BME workers are more likely to be struggling. Nearly one in five families (18 per cent) with kids under 11 say they will struggle to afford the basics. Over one in five (21 per cent) disabled workers will struggle to afford the basics, compared to 10 per cent of non-disabled workers. Meanwhile, 14 per cent of key workers say they’ll struggle to afford the basics in the next six months, compared to 10 per cent of non-key workers and 14 per cent of BME workers say they’ll struggle to afford the basics in the next six months, compared to 11 per cent of white workers.

The poll also reveals that a fifth of workers (21 per cent) say they have Christmas debts to pay off this year – a number that rises to over a quarter (28 per cent) for workers with children of school age.

The TUC says the government must do far more to help struggling households to get through the months ahead and claims the cost-of-living support announced by the Chancellor on Thursday is “woefully inadequate”, providing families with just £7 extra a week – “most of which will have to be repaid”.

The TUC is also calling for government to use the upcoming spring budget to, among other things, increase to UC to 80 per cent of the real Living Wage and boost the minimum wage to least £10 an hour now.

TUC General Secretary Frances O’Grady said:  “Universal credit urgently needs boosting and we need further action to reduce fuel costs for those battling to make ends meet.  Oil and energy companies shouldn’t be making bumper profits, while many struggle to heat their homes. If ministers fail to do what is necessary, more households will be pushed below the breadline.”

 



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