Upcoming changes to Universal Credit in the following year are set to have a significant impact on numerous claimants.

With over eight million individuals in the UK receiving Universal Credit administered by the Department for Work and Pensions (DWP), adjustments are on the horizon. These modifications will involve an increase in the standard allowance, the base payment in Universal Credit before any adjustments or deductions are applied.

Conversely, there are notable reductions expected in the health-related component for new claimants of Universal Credit. The transition from older legacy benefits to Universal Credit is ongoing, with the final individuals expected to be transferred by March 2026.

The implementation of Universal Credit entails the replacement of several benefits, including 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 post, granting them a three-month period to commence their Universal Credit claim.

Effective from April, the Universal Credit standard allowance will rise by 6.2%, exceeding the inflation rate. For example, the standard allowance for a single person aged 25 and above will increase from £92 to £98 per week, while for couples, it will rise from £145 to £154 per week.

Moreover, the Limited Capability for Work and Work-Related Activity (LCWRA) component, intended for those with health conditions or disabilities limiting their work capacity, is undergoing changes. While the current weekly payment is £97, from April 2026, new claimants granted LCWRA will receive £50 per week, remaining frozen at this level until 2029/30.

Existing claimants will retain the £97 weekly payment until 2030 without any annual increments. By 2030, the LCWRA component will be phased out and substituted with a new health element connected to PIP.

Additionally, a new subgroup, the Severe Conditions Category (SCC), within the LCWRA will be introduced in April 2026 for individuals with severe, lifelong disabilities and illnesses. Those falling under SCC will receive the current, higher rate of the LCWRA element and will be exempt from routine reassessments.