Falling through the cracks: the widening gap between unemployment and benefit statistics

The implementation of Universal Credit, by combining six in- and out-of-work benefits into one, could provide a much needed refocus on groups at the edges of the labour market who need support. It is also an opportunity to provide greater practical support to people stuck at low levels of earnings.

But our analysis suggests the new regime will still miss some key groups who currently do not claim support. And with a growing share of low earners in the gap, it is vital that the new in-work conditionality being introduced via UC for people earning less than a full-time job at the wage floor (with some exceptions for carers) supports people to either achieve a sustained employment outcome or progress to a higher level of earnings.