Universal Credit System Faces Overhaul Demand as 15 Million Households Prepare to Claim
The government is facing mounting pressure to address critical flaws in the Universal Credit system, with a new report warning that 15 million households will be relying on the benefit from April this year. This significant expansion comes as all six legacy benefits are finally replaced, bringing more recipients than ever into the system.
Systemic Challenges Persist Despite Expansion
Researchers from the influential Resolution Foundation have identified persistent problems that continue to plague the Universal Credit system, drawing on extensive evidence from claimants and welfare advisers. The transition marks a pivotal moment for social security in the UK, with the system now supporting more than half of all children nationwide – approximately 6.5 million young people.
One of the most pressing issues remains the five-week wait for initial payments after successfully claiming Universal Credit. This delay has been repeatedly criticised for pushing vulnerable individuals into financial crisis at precisely the moment they need support most. Research participant Alby described how this rule "pushes people into crisis at the exact moment they're most vulnerable", often forcing claimants to take advances that lead to subsequent deductions and deepening financial pressures.
Structural Flaws and Cultural Concerns
The Resolution Foundation's analysis reveals several structural weaknesses in the current system:
- Inflexible assessment periods that disadvantage self-employed workers and those paid weekly or four-weekly, potentially leaving them with less support than monthly earners receiving identical incomes
- Upfront childcare costs that prevent many claimants from entering employment or increasing their working hours
- Poor communication channels that leave recipients struggling to understand their rights and responsibilities
- Lengthy response times to information requests, creating additional uncertainty and stress
Universal Credit claimant Ella emphasised the need for systemic change: "It would make a huge difference to the lives of millions of Universal Credit claimants if we can co-produce and create a system which promotes dignity and respect. These values should be at the very core of Universal Credit so that no family is left lost in the system and wrongfully penalised."
Legacy Benefits Being Replaced
From April, Universal Credit will completely replace six means-tested legacy benefits that have been gradually phased out over thirteen years:
- Housing Benefit
- Income Support
- Income-based Jobseekers Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Child Tax Credit
- Working Tax Credit
Calls for Fundamental Reform
Lindsay Judge, Research Director at the Resolution Foundation, stressed the urgency of reform: "Universal Credit now supports more than half of all children in the UK, making it more urgent than ever that the government reforms the system to make it easier to use for the 15 million people who rely on it. Our proposals show that a range of structural and cultural changes could transform claimants' day-to-day experiences of the system with only a marginal increase in the year-on-year benefit spend."
The foundation advocates for a "fundamental culture reset" to rebuild trust alongside technical improvements, including softening the five-week wait and supporting parents with childcare costs. These changes would create a simpler, more flexible, and more dignified system for the families it serves.
Government Response and Ongoing Review
A Department for Work and Pensions spokesperson acknowledged the need for improvement while highlighting existing measures: "We support millions of people through Universal Credit every year and are pleased this report finds customer satisfaction is relatively high. We've taken action so parents can move into work and claim back most of their childcare costs. We're also putting cash back into people's pockets by boosting the standard rate of Universal Credit, and by changing the amount of debt that can be taken from customers allowing 1.2 million households to keep more of their money."
The spokesperson confirmed that the Universal Credit system is under review, including how claimants can be supported before receiving their first payment, indicating potential reforms may address some of the concerns raised in the report.
