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Coronavirus: UK unemployment rises as universal credit claims hit 2.5 million

Undated file photo of signage outside the Department of Works and Pensions in central London. Union leaders are calling for an emergency boost to Universal Credit to help people get through the coronavirus crisis.
Since 16 March, when the UK lockdown came into effect, the Department for Work and Pensions has seen 2.5 million individual claims for universal credit. (PA)

The UK government has received 2.5 million claims for universal credit since the coronavirus lockdown began, new figures show.

Since the start of the coronavirus pandemic, there has been unprecedented levels of demand for universal credit, with nearly a million applications for the benefit in the first two weeks of lockdown alone.

Universal credit is now the main benefit for the newly unemployed, suggesting a steep rise in unemployment as firms have axed staff and many self-employed workers have seen their incomes evaporate.

The new benefit, however, also replaces other benefits including working tax credits, meaning some applicants may have seen their pay slashed, health decline or other changes rather than lost their jobs.

Millions more workers at risk of redundancy have been furloughed on reduced pay subsidised by the government. Some claimants may have applied for benefits to top up low pay or help cover their rent.

READ MORE: Coronavirus lockdown measures protect banks and landlords more than families

Since 16 March, when the UK lockdown came into effect, the Department for Work and Pensions (DWP) has seen 2.5 million individual declarations with around 903,000 advance payments having been made. Around 763,000 of these are for new claim and benefit transfer advances, according to the DWP.

One in 20 workers said they had lost their jobs since the UK went into lockdown, according to a YouGov survey published on Wednesday.

The availability of candidates, a signal of rising unemployment or under-employment, soared at its fastest rate since 2009 in April, according to a jobs report by consultancy KPMG and the Recruitment & Employment Confederation. It marked the first month that candidate numbers had actually increased since 2013, with recruiters highlighting widespread redundancies.

READ MORE: UK furlough scheme extended to October with part-time work allowed

The new figures published last week showed a record drop in hiring and starting salaries tumbling, with permanent and temporary placements dropping in April at the fastest rate since the survey of UK recruitment firms began in 1997.

The UK chancellor, Rishi Sunak, has promised to extend government wage subsidies for millions of furloughed workers until the end of October to avoid further lay-offs, and will loosen the rules to allow people to work part-time. Sunak told the parliament on Tuesday (12 April) that 7.5 million workers have now been furloughed.