Major changes are on the horizon for Universal Credit next year that could have a significant impact on millions of recipients. Universal Credit, overseen by the Department for Work and Pensions (DWP), is currently claimed by over eight million individuals in the UK. The upcoming adjustments involve an increase in the standard allowance, which serves as the fundamental payment before any additional contributions or deductions.
However, there are also notable reductions planned for the health-related component of Universal Credit for new claimants. The transition to Universal Credit is gradually replacing most older legacy benefits, with the final migration expected to be completed by the end of March 2026. This shift encompasses the replacement of various benefits like 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 timeframe to initiate the claim process. Exceptions may apply for specific circumstances, such as continued eligibility for Housing Benefit in supported or temporary housing situations.
Starting from April next year, the Universal Credit standard allowance will undergo a 6.2% increase, exceeding the inflation rate. For instance, the standard allowance for single individuals aged 25 and above will rise from £92 to £98 per week, while for couples, it will increase from £145 to £154 weekly. The DWP projects that by 2029, above-inflation hikes will elevate the average standard allowance by £775 in real terms.
The Limited Capability for Work and Work-Related Activity (LCWRA) within Universal Credit caters to individuals with health conditions or disabilities limiting their work capacity. Presently set at £97 weekly, the LCWRA payment for new claimants will be reduced to £50 weekly starting April 2026, remaining frozen until 2029/30. Existing claimants will maintain the £97 weekly top-up until 2030 without any annual increments. Ultimately, by 2030, the LCWRA element will be phased out, replaced by a new health component linked to PIP.
A new subgroup termed the Severe Conditions Category (SCC) will be introduced within the LCWRA 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 exemption from routine reassessments, focusing on how their condition affects them rather than the condition itself.