Coronavirus: Universal credit claims hit monthly record

By Kevin Peachey
Personal finance reporter

Man walks past job centreImage source, Reuters

Claims for universal credit - the benefit for working-age people in the UK - hit a record monthly level in the early weeks of lockdown.

There were 1.5 million claims made between 13 March and 9 April, official figures from the Department for Work and Pensions (DWP) have confirmed.

This is six times more than in the same period last year.

What is universal credit?

Universal credit replaced six other benefits, such as jobseeker's allowance, income support, housing benefit, and tax credits. This unites all these benefits into a single payment.

The latest figures show that, as of 9 April, a total of 4.2 million people were in receipt of universal credit.

This was a rise of 1.2 million people in a single month. Further claims from others seeking universal credit may have been unsuccessful or remain unfinished.

Many people claiming will be in work but on low incomes, but others will have lost their jobs.

The DWP said that the number of people on universal credit had increased by 40% as a result of the coronavirus pandemic.

All regions had seen an increase in the total number of claims in the early stages of the pandemic, the department said.

By the 9 April, the north west of England was the region with the largest proportion of people claiming the benefit.

Polly Neate, chief executive of housing charity Shelter, said: "With a huge surge in people applying for benefits and early warning signs of major job losses to come, it's clear that Covid-19 is going to send shockwaves through our economy like never before.

"People paying average rents face huge shortfalls and many are racking up serious debts that put their homes at risk. Without more support, they will be swept up in a tidal wave of evictions when the government ban lifts."

The existing benefits trap

Image source, Jon Fitzgerald
Image caption,
Jon and Vicky Fitzgerald want to warn others about the issue

Copywriter Jon Fitzgerald was receiving tax credits, but they were stopped when he applied for universal credit when work dried up amid the coronavirus pandemic.

His universal credit claim was unsuccessful because of his savings, but the rules of the system mean his tax credits were not reinstated.

"We have now lost well over half our current monthly income at the press of a button," Mr Fitzgerald said.

"We took the government advice in late March to apply for universal credit to help us through [but] we have been left without financial support at a time when we most need it."

Anyone considering applying for universal credit is being urged to check their eligibility first, and ensure they will not end up worse off.