Number of workers on universal credit up by 1.3 million

The TUC has warned that millions of low-income workers face a ‘perfect storm’ this April with Universal Credit falling behind the cost of living as energy bills and taxes rise.

Analysis by the union has found that the number of workers on Universal Credit has increased by 1.3 million since the eve of the coronavirus pandemic. Statistics show that over 2.3 million workers were in receipt of Universal Credit 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 that as many as one in 14 (7.2 per cent) working adults now claim the benefit.

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

New polling - carried out for the union body before last week’s energy cap announcement and Bank of England forecasts - shows that many are already struggling to make ends meet. For example, 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.

The TUC is calling for government to use the upcoming spring budget to: increase to UC to 80 per cent of the real Living Wage; introduce a windfall tax on energy companies, using the money to reduce household energy bills; boost the minimum wage to least £10 an hour now; and work with unions to get pay rising across the economy.

TUC General Secretary Frances O’Grady said: “Millions of low-paid workers face a perfect storm this April. At the same time as energy prices and national insurance contributions shoot up, universal credit is falling in value. The government must do far more to help struggling families get through the tough times ahead. The support package announced by the Chancellor last week is woefully inadequate.

“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.”