Rachel Reeves and the Labour government have been slammed as “out-of-touch” after new official figures show a huge rise in Universal Credit (UC) claimants. There were 8.3 million people receiving UC last month — up significantly from 7.2 million at the same point last year — with the steep rise driven almost entirely by people who are not required to work.
The 1.1 million surge is the largest annual increase since the 12 months to April 2021, early on in the COVID pandemic. Michelle Lawson, Director at Lawson Financial, said the figures are “shocking”, with UC “becoming a way of life for a good number of the public”. Warning of further hard times ahead, she said: “Is this too generous? Can the handouts continue?
“With such a punitive economic climate and families struggling, turning to the public purse should be a last resort but so many rely on this for an income stream.
“With the upcoming Budget and the threat of a further rise in unemployment due to additional tax rises, I would expect these figures to increase, which is a bleak outlook not only for families but the flailing, out-of-touch Government.”
The UC figures, which cover England, Wales and Scotland, were released by the Department of Work and Pensions (DWP) on Tuesday.
It shows four million of the claimants last month are in the no work requirements category, representing nearly half (48.7%).
Those in the category accounted for 40.4% (2.9 million) of all UC claims in October 2024 and 36.3% (2.2 million) in October 2023.
Sam Alsop-Hall, Chief Strategy Officer and Co-Founder at Clive Henry Group, said the leap to 8.3 million UC claimants is a “flashing red light for Labour’s economic experiment”.
“This is not social justice, it is slow-motion sabotage of ambition.
“The rise in people with no work requirements and the drop in childcare support show a system that traps people instead of empowering them.
“Labour’s obsession with redistribution over growth is draining the life out of the economy and crushing confidence in business.”
UC is a payment to help with living costs and is available for people in work who are on low incomes, as well as those who are out of work or cannot work.
People in the “no work requirements” bracket can include those in full-time education, over the state pension age, someone with a child aged under one, and those considered to have no prospect of work.
In a further blow to the Chancellor and Labour, official figures also released on Tuesday showed the rate of unemployment has risen to 5% in the three months to September, up from 4.8% in the three months to August.
The UK’s jobless rate is now at its highest level outside the COVID-era for nearly a decade.
It comes around two weeks before Ms Reeves is due to unveil her Budget.
Tax rises are widely expected to help plug a black hole in public finances estimated to be as much as £50 billion.
A DWP spokesperson said the number of people receiving UC has increased because “tens of thousands of people each month” have been invited to move from legacy benefits as they are phased out.
The Government is “determined” to get more people off welfare and into work, the spokesperson added.
