Big changes are on the horizon for Universal Credit next year, potentially affecting millions of claimants. This benefit, which is received by over eight million people in the UK and administered by the Department for Work and Pensions (DWP), will see adjustments to various elements.
One notable change involves an increase in the standard allowance, the foundational amount provided by Universal Credit before any additional payments or deductions. However, there are also significant reductions planned for the health-related component for new claimants.
Universal Credit is gradually replacing several older benefits, with the transition expected to be completed by March 2026. This shift includes replacing Tax Credits, Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, and Housing Benefit.
Individuals required to switch to Universal Credit will receive a “migration notice” by mail, outlining a three-month period to initiate their claim. Exceptions may apply for certain cases, such as continued eligibility for Housing Benefit in supported or temporary accommodation situations.
Starting from April, the Universal Credit standard allowance will rise by 6.2%, exceeding the inflation rate. For instance, the standard allowance for individuals aged 25 and above will increase from £92 to £98 per week, while for couples, it will go up from £145 to £154 weekly.
The Limited Capability for Work and Work-Related Activity (LCWRA) element of Universal Credit, aimed at individuals with health issues or disabilities affecting their work capacity, is currently set at £97 per week. However, from April 2026, new claimants qualifying for LCWRA will receive £50 per week, with a freeze in place until 2029/30.
Existing claimants will retain the £97 weekly top-up until 2030 without any annual increments. By 2030, the LCWRA element will be phased out and replaced by a new health component linked to Personal Independence Payment (PIP).
Furthermore, a new subgroup known as the Severe Conditions Category (SCC) will be introduced in April 2026 for individuals with severe, long-term disabilities and illnesses. Those falling under SCC will receive the current higher rate of the LCWRA element and will be exempt from routine reassessments.
The assessment criteria will focus on how a claimant’s condition impacts them rather than the specific condition itself. These forthcoming changes seek to streamline and enhance the Universal Credit system to better support those in need.