Big changes are on the horizon for Universal Credit in the upcoming year, potentially affecting millions of claimants. Universal Credit, a benefit received by over eight million individuals in the UK, is administered by the Department for Work and Pensions (DWP).
One notable adjustment involves an increase in the standard allowance, the fundamental amount allocated in Universal Credit before any supplementary payments or deductions are factored in. However, there are significant reductions expected for the health-related component for new Universal Credit applicants.
The transition to Universal Credit is gradually replacing most older legacy benefits, with all individuals anticipated to be transferred by the conclusion of March 2026. Legacy benefits such as Tax Credits, Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, and Housing Benefit are being phased out in favor of Universal Credit.
Individuals required to transition to Universal Credit will receive a “migration notice” by mail, providing a three-month timeframe to commence the Universal Credit application process. Certain circumstances may allow the continuation of old benefits, such as the ability to retain Housing Benefit while in supported or temporary housing.
Effective from the following April, the Universal Credit standard allowance is set to rise by 6.2%, exceeding the inflation rate. For instance, 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 weekly. The DWP projects that by 2029, above-inflation increments will enhance the average standard allowance by £775 in monetary terms.
The Limited Capability for Work and Work-Related Activity (LCWRA) represents the health-related segment of Universal Credit, offering supplementary monthly payments to individuals with health issues or disabilities limiting their work capacity. Currently set at £97 weekly, new claimants awarded LCWRA from April 2026 will receive £50 per week, thereafter remaining frozen at this level until 2029/30.
Existing claimants will have their top-up maintained at £97 weekly until 2030, without any annual escalations. By 2030, the LCWRA element will be eliminated, replaced by a new health component linked to PIP. A fresh subgroup within the LCWRA, the Severe Conditions Category (SCC), will be introduced in April 2026 for individuals with severe, lifelong disabilities and illnesses, receiving the current higher rate of the LCWRA element.
Moreover, those falling under the SCC will be exempt from regular reassessments for this element, with evaluations focusing on the impact of their condition rather than its specific nature.
