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COVID puts more than one million workers on universal credit

·Finance Reporter, Yahoo Finance UK
·2-min read
COVID puts more than one million workers on universal credit
Food donations increased during the pandemic as more Brits struggled to make ends meet. Photo: Hannah McKay/Reuters

The number of working universal credit claimants has risen by 1.3 million since the COVID-19 pandemic began, new research has revealed.

Analysis by the Trades Unions Congress (TUC) found that more than 2.3 million workers received universal credit at the end of last year compared with just over a million before the pandemic hit in February 2020.

This represents an increase of 130% over the last two years and means 1 in 14 working adults now claim universal credit.

The union said the increase had been driven by working households being pushed into financial hardship during the pandemic, with millions facing a “cost of living crunch” this year.

It also warned that low-income workers face a “perfect storm” this spring unless ministers improve “woefully inadequate” levels of support.

Read more: Rishi Sunak warns of further hikes as Ofgem amends price cap regime

“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,” Frances O’Grady, the TUC’s general secretary, said.

“Universal credit urgently needs boosting and we need further action to reduce fuel costs for those battling to make ends meet. The best way to give working families long-term financial security is to get pay rising across the economy.”

A survey of more than 2,200 workers for the TUC found one in eight (12%) said they will struggle to afford basics in the coming months.

One in six (17%) workers earning below £15,000 per year said the same, while three in ten (29%) reported that they will struggle to afford more than the basics.

Some 18% of families with children under 11, 21% of disabled workers, 14% of key workers and 14% of workers from a Black or minority ethnic background reported that they will struggle to afford the basics in the next six months.

Read more: How to cope with soaring energy prices and household costs

The analysis found that a fifth of workers have Christmas debts to pay off this year, a number that rises to more than a quarter for workers with children of school age.

Households face the worst squeeze ever experienced in the UK as energy bills are set to rise £693 to a typical £1,971 a year.

The government has sought to ease the cost-of-living crisis by offering most households £350 in support. However, critics have claimed this will do little to help those most affected.

The TUC has called on the government to increase universal credit to 80% of the real living wage.

Universal credit is paid monthly to help low-income families, or unemployed households, with living expenses.

Watch: How to save money on a low income