Coronavirus to force 3.5 million extra people on to Universal Credit

More than 2.5m more people will file for Universal Credit on top of the near-million claims that have already been submitted as a result of coronavirus. 

In all around 3.5m new Universal Credit claims are expected to be processed, according to a survey conducted by Turn2us, a charity.

As a result of the virus, more than half a million households are being forced to claim means-tested benefits for the first time. An additional 3pc of working-age families, or 590,000 in all, will fall into this category, the survey of 2,000 people found.

A quarter of businesses are laying off staff to help them survive, according to the Office for National Statistics, which is forcing people to turn to the state for help. 

The Government has ordered that all people stay at home apart from for essential journeys, such as to buy food or medicine, and to only carry out one piece of outside exercise a day. In response, many businesses have shut as they are unable to shift their services online. 

The charity estimates that 1.7 million households are currently unable to afford food due to the effect on their employment, while 2.2 million families can no longer afford rent or mortgage payments.

Single-parent families are the hardest hit because they are already in the most financially-vulnerable situations. Turn2us found that 1.2 million single-parent households will have £1,000 or less next month in income, an increase of 216,000 compared to February, before Covid-19 measures began.

The Institute for Fiscal Studies (IFS) found that young workers are the most likely to be impacted by the economic shutdown because they work in roles that cannot keep operating under government guidelines, such as the retail and leisure industries. It said employees aged under 25 were roughly two-and-a-half times more likely to work in a sector that is now shut down than other workers. 

In addition, the virus is striking the most vulnerable in society the hardest. Households that spend a higher percentage of their income on essential goods and services, such as rent and groceries, are the most affected by a decline in income. Their fixed costs will become a larger share of their income or become even greater than their income, during the shutdown period. 

The poorest fifth of households direct 55pc of their budgets on average to essentials, compared with just 39pc for the richest fifth, according to the IFS. 

Turn2us is The Telegraph’s charity partner for its coronavirus appeal. It offers online tools and pays out £500 to people who have less than £1,000 in savings and can demonstrate a loss of income due to Covid-19. This helps bridge the five-week gap for Universal Credit payments to start arriving.