The DWP is making important changes to Universal Credit that could affect millions of claimants soon
Birmingham: The Department for Work and Pensions (DWP) is gearing up to roll out three big changes to Universal Credit soon. As of November 2023, around 6.27 million people are relying on Universal Credit, especially with the ongoing Cost of Living crisis.
Out of those, about 2.3 million are working but still need this income-related benefit. Starting April 8, Universal Credit payments are set to increase by 6.7%. But don’t expect to see the full boost right away; it might take until May for that to kick in since payments are made in arrears.
So, payments after April 8 will mix the old and new rates until everything is sorted out. You can check the new payment rates on GOV.UK. The Social Security Uprating Bill has already passed through the House of Lords, so it looks like these changes are pretty much locked in.
In a major shake-up, all tax credit claimants will need to switch to new benefits, but they have to apply for it themselves. Depending on their situation, they’ll either move to Universal Credit or Pension Credit.
By 2024, many folks are expected to have made the switch from various tax credits. The government is urging anyone still on tax credits who got a migration notice to apply for Universal Credit or Pension Credit right away.
To help those on the lowest incomes, the government plans to boost the Standard Allowance for Universal Credit recipients. Each year, the Secretary of State for Work and Pensions has to review benefit levels and State Pensions.
This briefing covers the main benefit, pension, and tax credit rates for the 2025/26 financial year. Starting April 2025, benefits and tax credits linked to inflation will rise by 1.7%, based on the Consumer Prices Index (CPI) from September 2024.
Thanks to this CPI increase, Universal Credit standard allowances will also go up. For the first child born before April 6, 2017, the rate will rise from £333.33 to £339 a month. For children born after that date, the rate will increase from £287.92 to £292.81 a month.
Additionally, the lower rates for disabled children will go from £156.11 to £158.76 a month, while the higher rates will jump from £487.58 to £495.87 a month.
