New statistics from the Department for Work and Pensions have proven eight million people are at the moment receiving Universal Credit. This marks the highest determine since the benefit was first launched in 2013 and represents over a million more claimants than the earlier 12 months. In July last 12 months, 6.9 million claimants were recorded.
Universal Credit is designed to help with the price of residing for those who are unable to work, at the moment out of work or in low-income employment. Experts are sounding warnings about this ultimate group particularly, highlighting the financial penalties of having staff who can not survive on their wages alone and must rely on authorities help to get by despite being employed.
Currently, 34% of Universal Credit claimants are in employment, while 46% fall into the “no work requirements” bracket.
Whilst some analysts attributed these climbing numbers to the broader financial climate, others highlighted the impression of Labour’s welfare reform launched earlier this 12 months.
Originally called the Universal Credit and Personal Independence Payments Bill, this laws contained some controversial proposals altering the eligibility standards and cost quantities for both advantages.
Major concessions were made before the Bill was voted through the House of Commons, but one reform still in the pipeline is adjustments to the health ingredient of Universal Credit that will halve and freeze the quantity that people obtain if they apply for the benefit after next April.
Samuel Mather-Holgate, Independent Financial Adviser at Mather and Murray Financial, commented: “It’s no surprise if you frighten the life out of a population telling them new claimants are not going to get enough to live on, you get a lot of people trying to beat the deadline. Now the government has rowed back on their proposals, these figures should settle down.”
However, other consultants believe there’s a greater narrative driving these figures. Keith Budden, Managing Director at Ensurety, acknowledged: “For me, the most important statistic here is not that Universal Credit claimants have increased by almost a million but that 34% of the claimants are ‘in work’, i.e. not lazy layabouts as some might say, but hardworking men and women who simply aren’t earning enough to survive – and we know many of these are having to use food banks too.
“How have politicians of all colors allowed our financial system to attain this scenario, where employers in the public and personal sector aren’t paying their workers enough to obtain a fundamental stage of income?”.
Pete Mugleston, Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk, commented: “An increase of over a million people on Universal Credit in just a 12 months displays the financial difficulties many households are going through. It suggests more households are struggling to discover secure, well-paid work and are relying on the security web to get by.
“This puts the government’s core priority of delivering growth under greater scrutiny and raises questions over how it will manage the growing fiscal cost of supporting so many people.”
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