Record high employment in February, and record numbers of new Universal Credit applications in March show the difference a few weeks has made

Over 1.7 million individuals have begun Universal Credit claims since the Government advised against all but essential contact and travel in March – just weeks after the country recorded a new recordhigh employment rate – the Resolution Foundation said today (Tuesday) in response to the latest labour market figures and new Universal Credit claimant numbers released this morning.

The latest data on the UK labour market showed that employment had reached another record high (76.6 per cent) in the three months to February. However, the Foundation notes that today’s data on Universal Credit claimants confirm that the UK is unlikely to be setting new employment records for many years to come.

The Department for Work and Pensions states that it received over 1.7 million declarations (the information provided to begin a claim) to Universal Credit from 17 March (the day after restrictions on all but essential contact were introduced) to 12 April – six times higher than the rate of declarations in the first half of March.

The number of people beginning UC claims has since fallenThe number of declarations in the week beginning 6 April was still 3.5 times the rate at the start of March, before the coronavirus-related surge. But this compares to declarations over 8 times higher than in the first week of March in the initial week after the lockdown began on 23 March.

These figures are in line with research published last week by the Foundation. This analysis showed that employment is likely to fall by 8 percentage points, and unemployment will peak at almost 2 million, if social-distancing measures are needed for three months – figures that would rise imeasures are in place for longer.

The Foundation notes that 427,000 households have received a benefit advance associated with a new claim since 16 March. Although advance payments will naturally lag UC declarations, this corresponds to only 31 percent of the number of new declarations in that period.  

Laura Gardiner, Research Director at the Resolution Foundation, said: 

Universal Credit is a lynchpin in the Government’s strategy for protecting household incomes. Today’s data shows an unprecedented increase in people beginning UC claims since coronavirus restrictions began. These numbers have been easing off since the first week of lockdown, but the pressure is by no means off the Department for Work and Pensions.

The number of advance payments is much lower than the numbers beginning UC claims – this is despite welcome steps from DWP to make claiming advances as straight-forward as possible.  

It’s important that new claimants are not put off asking for an advance by fear of going into debt. Suspending the repayment of advances for the duration of the coronavirus outbreak is one step the Government can take to encourage those who need them to make a claim and so lessen the economic hit many households are now bearing.”