Number of people on Universal Credit jumps over a million in just one year: "Households are struggling"

FINANCIAL experts have slammed politicians for “allowing our economy to reach this situation” after figures showed the number of people on Universal Credit jumped by over a million in just one year.

The Department of Work and Pensions (DWP) revealed in new data that eight million people were on Universal Credit in July 2025, up from 6.9 million people in July 2024.

The proportion of people in the ‘no work requirements’ conditionality regime is now at 46%.

Approximately 3.1 million UC households, 47%, had one or more deductions taken from their UC entitlement in May 2025.

Financial experts said the figures show just how bad the UK economy has fallen to with millions of households struggling - even if they are working full time.

Keith Budden, Managing Director at Liss-based Ensurety, asked how politicians had let the situation get so bad.

He added: "For me, the most important statistic here is not that Universal Credit claimants have increased by almost a million but that 34% of the claimants are 'in work', i.e. not lazy layabouts as some might say, but hard working men and women who simply aren't earning enough to survive — and we know many of these are having to use food banks too. 

"How have politicians of all colours allowed our economy to reach this situation, where employers in the public and private sector aren't paying their staff enough to achieve a basic level of income? 

“The other statistic regarding deductions from UC, again many will assume/suggest this to be fines. While true for some, the majority are probably renters with a 'spare room' for which they are penalised. So worrying? Yes, but let's worry for the right reasons.”

Pete Mugleston, Mortgage Advisor & Managing Director at Derby-based onlinemortgageadvisor.co.uk, said the figures showed just how households are struggling in the past year. 

He continued: "A rise of over a million people on Universal Credit in just a year reflects the economic difficulties many families are facing. It suggests more households are struggling to find secure, well-paid work and are relying on the safety net to get by. 

"This puts the government’s core priority of delivering growth under greater scrutiny and raises questions over how it will manage the growing fiscal cost of supporting so many people."

Dariusz Karpowicz, Director at Doncaster-based Albion Financial Advice, added: 
"Over a million more people joining Universal Credit in 12 months tells a stark story about Britain's economy under Labour - and it's not the growth narrative Rachel Reeves promised. 

"With nearly half of claimants facing deductions and a third already in work but still needing state support, we're witnessing the uncomfortable reality of an economy where even employment doesn't guarantee basic living standards. 

"The Chancellor's borrowed time may be running out faster than her fiscal headroom. When eight million people depend on UC and government spending consumes half our GDP, any politician brave enough to tackle this dependency faces electoral suicide - creating a vicious cycle where economic stagnation becomes politically entrenched for decades to come."

Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial, said: "It’s no surprise if you frighten the life out of a population telling them new claimants are not going to get enough to live on, you get a lot of people trying to beat the deadline. 

“Now the government has rode back on their proposals these figures should settle down. Self imposed torture.”

Scott Gallacher, Director at Leicester-based Rowley Turton, said: “Over a million more people on Universal Credit in just one year is yet more bad news for the Chancellor. Well over a year since Labour took office, the economic data keeps getting worse, with their promised growth nowhere to be seen. 

"If this trend continues, Rachel Reeves is surely on borrowed time. But the real question is who could replace her, and whether Labour has any plan B to fix the mess we’re in."