8.3 million people on Universal Credit in rise of one million in just a year: "It's a bleak outlook for families"

THE amount of people on Universal Credit in the UK has risen by one million in just one year, with experts warning "it's a bleak outlook for families".

There were 8.3 million people on Universal Credit in October 2025, up from 7.2 million people in October 2024, the Government announced today.

It was driven in part by claimants moving from legacy benefits under the Move to Universal Credit programme.

The report showed the proportion of people with “no work requirements" continues to increase, now at 49%.

Universal Credit households with children accounted for nearly half, 47%, of all households with a payment in August 2025.

Though approximately 3.1 million Universal Credit households, 46% of all Universal Credit households, had one or more deductions taken from their Universal Credit entitlement in August 2025.

This comes as unemployment figures released today hit 5% – the highest figure since 2021.

Financial experts questioned whether this level of Universal Credits is sustainable.

Michelle Lawson, Director at Fareham-based Lawson Financial, said: "Some shocking statistics here showing Universal Credit is becoming a way of life for a good number of the public. 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, the threat of a rise of unemployment due to forecast tax rises, I would expect these figures to rise further, which is a bleak outlook not only for families but the flailing, out of touch Government.”

Paul Harrison, Co-founder at The Travel Franchise, said it was a good opportunity for people to set up their own businesses from home.

He added: "The government's recent figures show there is a rising tide of economic inactivity linked to long-term sickness and this now costs the country approximately 7% of GDP - and is set to rise significantly. Over 1 in 5 working-age people are now out of work and not looking for work. 

"Yet I passionately believe that starting businesses from home can help alleviate that burden. Our model enables people to move away from relying on Universal Credit or sick pay and build successful, independent travel businesses on their own terms. 

“Building your own business can be one of the most fulfilling things you can do - especially if you have a disability or illness that has limited your quality of life for years. With the right support and training, we have proved that people overcoming immense challenges can become entrepreneurs in their own right, earning significant amounts as a result, while also improving their mental and physical wellbeing.”

Sam Alsop-Hall, Chief Strategy Officer & Co-Founder at Birmingham-based Clive Henry Group, slammed the government.

He continued: “The surge to 8.3 million people on Universal Credit is a flashing red light for Labour’s economic experiment. This is not social justice, it is slow-motion sabotage of ambition. Bar Stool Economics explains it perfectly: when you keep taking more from those who create and give more to those who don’t, eventually there is no one left to pick up the tab. 

"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. 

"Britain does not need more bureaucracy or dependency, it needs belief in hard work, innovation and enterprise. Right now, that belief is being taxed out of existence with plans to tax us more on the horizon - on Remembrance Day I think it’s poignant to wonder if anyone would have fought for this ?”

Pete Mugleston, Mortgage Advisor & Managing Director at Derby-based onlinemortgageadvisor.co.uk, agreed, adding: "Unemployment has also surged to 5%, a four-year high, and yet more pain is coming in the form of tax rises. 

"We need to get Britain growing again by incentivising businesses to invest in people. Labour’s increases to National Insurance and the living wage may have been politically popular, but they’ve contributed to rising unemployment as firms hold back on hiring. 

“The Budget must deliver a coherent plan to reduce energy costs, cut taxes, and unlock investment from the UK’s vast pension market to fund growth and job creation.”