Chancellor Rachel Reeves has officially announced a significant, above-inflation increase to Universal Credit payments, set to take effect from April 2026. The move forms part of what the Treasury describes as a "rebalancing" of the benefit system and will provide a substantial boost to millions of households across the UK.
Details of the Universal Credit Increase
The standard allowance for Universal Credit will rise by 6.2%, a figure that comfortably outstrips the current Consumer Prices Index (CPI) inflation rate of 3.2%. This represents a tangible financial uplift for claimants. For example, a single person aged 25 or over will see their monthly payment increase by almost £25.
In a parallel and highly significant policy shift, the government has also confirmed it will scrap the controversial two-child benefit cap. This change will allow parents with larger families to claim hundreds of pounds in additional support each year, marking a major reversal of previous welfare policy.
Not All Changes Are Positive
However, the announcement does not bring good news for all benefit recipients. The Chancellor's rebalancing act includes a reduction in the health top-up for new claimants. Specifically, the Limited Capability for Work-Related Activity (LCWRA) element is being cut by almost half for those who are not already receiving it.
This payment is an additional amount for people who have a long-term health condition or disability that severely limits their ability to work. The reduction will apply only to new claims made after the changes come into force, not to existing recipients.
Guidance for Claimants
Charities like Citizens Advice are already preparing to help people understand the impact. They clarify that a Universal Credit payment is comprised of a standard allowance plus any extra amounts based on personal circumstances, such as having children or a housing costs element.
The organisation advises that all claimants should see an increase in their standard allowance from April 2026, but those potentially eligible for the LCWRA element after that date will receive a lower additional sum than under current rules. It is crucial for individuals to check how these combined changes will affect their specific household budget.
This dual approach of increasing core support while adjusting specific premiums underscores the government's stated aim of reshaping the welfare landscape. The coming months will reveal the full practical effect of these changes on household finances across the nation.
