The Department for Work and Pensions (DWP) is making several key changes to Universal Credit this year that will affect millions of people.
The biggest change that will directly impact your payments, is the Universal Credit standard allowance will rise from this April. The standard allowance is the basic amount you get before any additional elements – for example, if you have children or are unable to work due to illness – or any deductions are taken into account. It is based on your age and if you live with someone.
If you are in receipt of additional elements, then these will also go up from April. DWP benefit claimants will also find the limit for how much can be taken off your Universal Credit for debt deductions is also falling from April 2025. Meanwhile, more people will be moved to Universal Credit as the process to close older legacy benefits continues into 2025.
Benefit payments normally rise every April in line with the previous September rate of inflation – and this includes Universal Credit. It has been confirmed that benefits will increase by 1.7% from April 2025. But as Universal Credit is paid monthly in arrears based on your “assessment period”, you may not see your increase filter through until as late as June 2025. Here is how much extra you’ll get:
Standard allowance
Child element
Limited capability for work
Carer element
Work allowance
Childcare costs element
The most that can be taken from your Universal Credit each month to recover debts is currently 25% of your standard allowance – but this is falling to 15% from April 2025. The types of debts that can be recovered through Universal Credit include energy and water bills, council tax, rent arrears, service charges, child maintenance and court fines. You may also be subject to deductions if you owe the DWP money, for example, if you were overpaid. Here is how debt deductions are changing:
Third-party deductions at 5% of Universal Credit standard allowance (excludes deductions for rent and service charges)
Minimum deductions for rent and service charges at 10% of Universal Credit standard allowance
Maximum deductions for rent and service charges at 15% of Universal Credit standard allowance (previously 20%)
Overall maximum deduction rate at 15% of Universal Credit standard allowance (previously 25%)
The DWP will continue to move more people to Universal Credit this year and expects to have sent all managed migration notices by the end of December 2025. This means all legacy benefit claimants should be moved to Universal Credit by March 2026. Universal Credit is replacing:
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