The Royal Society for Arts, Manufactures and Commerce (RSA) says the government will further erode the link between hard work and fair pay if it proceeds with the cut.

From the end of September, the ‘uplift’ to Universal Credit of £20 per week, or more than £1,000 per year, will come to an end.

According to the RSA London, the South East and the North West have the highest numbers of key workers on Universal Credit, with the South East having more than 85,000.

Figures suggest that the percentage of key workers relying on Universal Credit is similar across the country, although Scotland, the North East, North West and Wales top the chart for the proportion of recipients, with London the lowest.

The RSA says the large number of key workers receiving Universal Credit is symptomatic of issues in the UK with in-work poverty. Recent RSA data analysis found that care workers in particular have suffered immensely during the pandemic, with a large proportion paid below the ‘real’ living wage.

In-work poverty is a growing issue, with some estimates suggesting that as many as one in eight workers are living below the poverty line.

Alongside problems with sick pay and difficulties with self-isolation, many of the worst impacts of the pandemic may still be yet to come.

Alan Lockey, head of the RSA’s future of work programme, said: “The link between hard work and fair pay is broken — and this cut will only make it worse. In the short-term, the government needs to protect this vital lifeline for millions of hardworking Brits, especially our pandemic heroes working as nurses, social carers and supermarket assistants.

“In the long-term, the government needs to make work pay — expanding the use of the living wage, tackling insecure work, and making benefits such as sick pay more generous and universal.”