Universal Credit claimants have reached a record-breaking eight million people in July 2025, marking the highest level since the benefit system was introduced in 2013. The figure represents a staggering increase of more than one million claimants in just one year, rising from 6.9 million in July 2024.
The steep rise has been driven almost entirely by people who are not required to work, with 3.7 million falling into this category. This represents a 39% increase of one million people since July 2024, including those in full-time education, over state pension age, parents with children under one, and those considered to have no prospect of work.
Record surge reflects system transition
The increase largely reflects vulnerable customers moving from legacy benefits to the modernised Universal Credit system, a process that began in July 2024. Meanwhile, working people claiming Universal Credit rose slightly to 2.2 million in July, up from 2.1 million the previous year.
For the first time, demographic data reveals that 83.8% of claimants are British and Irish nationals, with 99.9% of this group being UK citizens. Almost one in 10 (9.6%) hold EU Settlement Scheme settled status, while 2.7% have indefinite leave to remain in the UK.
Breakdown shows diverse claimant base
Refugees account for 1.5% of claimants, while 0.7% arrived through safe and legal humanitarian routes including Ukrainian and Afghan resettlement schemes. Around 0.9% have limited leave to remain in the UK, covering those with temporary immigration status.
The Department for Work and Pensions published these immigration status breakdowns following a public commitment to investigate and develop detailed caseload analysis. Around a third of British and Irish nationals claiming Universal Credit were in work.
Government defends welfare reforms
The Labour Government maintains it "inherited a broken welfare system and spiralling, unsustainable benefits bill" from the Conservatives. A Government spokesperson said the figures provide "yet more evidence of the broken welfare system we inherited that is denying people the support they need to get into work and get on at work."
The Government is implementing reforms including tightening eligibility rules and has committed £3.8 billion in employment support over this Parliament. Universal Credit provides payment support for living costs and remains available for people in work on low incomes as well as those who are unemployed or cannot work.
Political criticism emerges
Helen Whately (Conservative), the shadow work and pensions secretary, criticised the figures. She said: "Labour promised good jobs but are just putting people on more benefits paid for by ever higher taxes."
Universal Credit was designed to replace six legacy benefits with a single monthly payment system. The benefit system supports both working people on low incomes and those unable to work due to various circumstances.
Sources used: "PA Media", "MyLondon", "Chronicle Live" Note: This article has been edited with the help of Artificial Intelligence.
