The Department for Work and Pensions (DWP) is providing 4 million households with an additional £295 Universal Credit boost this tax year as part of a 'rebalancing' of the benefit system. The Government has increased Universal Credit payment rates for 2026-27 in an effort to support families struggling with the cost of living crisis.
Figures from the charity Save The Children reveal that 59 per cent of households receiving Universal Credit are in employment and rely on the supplementary income to make ends meet. From 6 April 2026, the basic rate of Universal Credit will rise by £295 annually, with projections showing an additional £725 by the decade's end.
However, the Universal Credit 'Health Element' is being slashed by nearly half for new claimants, dropping from £429.80 to £217.26, as the Government attempts to control the escalating welfare bill, especially concerning health-related claims.
Universal Credit Boost Details
From April, the standard allowance for Universal Credit rose from £316.98 to £338.58 monthly for single claimants under 25, and from £400.14 to £424.90 for those aged 25 or over. Couples under 25 saw rates increase from £497.55 to £528.34, while those 25 and over now receive £666.97 per month, up from £628.10. These rates exclude supplements like the Child Element, which is no longer restricted to two children following the scrapping of the two-child benefit cap for Universal Credit from this new tax year. The Child Element provides an extra £351.88 monthly for the first child and £303.94 for each subsequent child, with no limit on the number of children, although the overall household benefits cap still applies.
Government Statement on Welfare Reforms
When announcing these changes last summer for the new tax year, the DWP stated: "Nearly 4 million households will see an annual income boost estimated to be worth £725 cash as a Bill to overhaul the welfare system completes the next stage of its passage through Parliament."
The department added: "For the first time ever, the Universal Credit standard allowance will permanently rise above inflation, amounting to £725 by 2029/30 in cash terms for a single person aged 25 or over."
It continued: "This is the highest permanent real terms increase to the main rate of out-of-work support since 1980, according to the IFS. Reforms set out in the Universal Credit Bill will look to rebalance the core payment and health top up in Universal Credit (UC). This will address the fundamental imbalance in the system which creates perverse incentives that drive people into dependency."
