The Department for Work and Pensions (DWP) has announced plans to “rebalance” Universal Credit (UC) payments in response to a significant rise in claimants, which surged by over one million in 2025. This marks the most substantial annual increase since the onset of the Covid-19 pandemic.
Provisional data from the DWP reveals that the number of Universal Credit claimants reached 8.40 million in December 2025, up from 7.36 million in December 2024. Universal Credit provides financial support to low-income workers, the unemployed, and those unable to work due to various reasons.
The Labour Party has previously criticized the welfare system as flawed and financially unsustainable, pointing to reforms it introduced to tighten eligibility criteria for Universal Credit claims.
In response, the Government has announced a “rebalancing” of Universal Credit payments starting in April. This adjustment aims to reduce the disparity between benefits for the unemployed and those on long-term sickness benefits.
The claimant increase of 1,044,865 in 2025 slightly surpasses the rise seen between 2023 and 2024, reflecting ongoing pressures on the welfare system. The largest spike on record occurred during the Covid pandemic’s early phase, with claimants rising from 2.73 million in December 2019 to 5.88 million in December 2020, largely due to a temporary uplift in UC allowances as part of pandemic support measures.
The recent surge is predominantly attributed to individuals not required to work, such as full-time students, pensioners, parents of infants under one year old, and those deemed unlikely to find employment. Claimants not required to work increased from 3.06 million in December 2024 to 4.17 million in December 2025, while working claimants slightly declined from 2.25 million to 2.19 million in the same period.
Looking ahead, the Government aims to complete the nationwide roll-out of Universal Credit by 2026. By March 2026, all legacy benefit claimants are expected to transition to Universal Credit, concluding the integration process.