Universal Credit, a benefit provided by the Department for Work and Pensions (DWP), is set to undergo significant changes next year, affecting millions of recipients. The alterations will involve an increase in the standard allowance, which represents the fundamental amount received before any additional adjustments are applied.

However, there are upcoming reductions in the health-related component for new Universal Credit claimants. The transition to Universal Credit from older legacy benefits is underway, with completion expected by March 2026. This shift encompasses the replacement of various benefits such as Tax Credits, Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, and Housing Benefit.

Recipients being moved to Universal Credit will be notified through a “migration notice” received by mail, providing a three-month timeframe to initiate the Universal Credit claim. Exceptions exist for certain cases where individuals can retain old benefits, like continuing to claim Housing Benefit in supported or temporary housing situations.

Starting from April, the Universal Credit standard allowance will see a 6.2% increment, surpassing the inflation rate. For instance, the standard allowance for 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 estimates substantial cash boosts in the average standard allowance by 2029.

The Limited Capability for Work and Work-Related Activity (LCWRA) within Universal Credit, designed for individuals with health limitations affecting work capacity, will undergo changes as well. The current weekly amount of £97 for LCWRA will decrease for new claimants to £50 by April 2026, remaining frozen at this level until 2029/30. Existing claimants will retain the £97 top-up without annual increases until 2030, after which the LCWRA element will be phased out and replaced with a new health element linked to PIP.

In April 2026, a new subgroup called the Severe Conditions Category (SCC) will be introduced under LCWRA for individuals with severe, lifelong disabilities and illnesses. Members of SCC will receive the current higher rate of the LCWRA element and will be exempt from routine reassessments based on the impact of their condition rather than its nature.