People on benefits will be handed as much as £465 extra per year following a rule change announced in Chancellor Rachel Reeves’ Autumn Budget on Wednesday.
Universal Credit, the most commonly paid benefit in the UK apart from the state pension, is being given a big increase from April 2026 as part of the latest round of spending plans.
Normally, DWP benefits like Universal Credit would be increased in line with inflation each April, which this year would make it a 3.8% boost based on September’s CPI figures.
But Universal Credit’s Standard Allowance is being given an extra top-up from April, putting the increase at an inflation-busting 6.2% for both single claimants and for couples.
That means the payments will increase by £295 a year for a single person aged over 25, and £465 a year for those in a couple.
As part of Budget announcements issued on Wednesday, HM Treasury said: “The Universal Credit Standard Allowance for a single person aged 25 or over will increase by around £295 a year, over £110 more than if up-rated by inflation alone.
“For couples, where one partner is aged 25 or over, it will increase by around £465 a year, approximately £180 more than if up-rated by inflation alone.”
The increase comes at the same time that the government is scrapping the two-child benefit cap, which would have limited the amount of Universal Credit boost a claimant could receive if they had more than two children.
At the same time, the government will cut Limited Capacity for Work Related Activity payments in half for new claims and freezing the existing rate for existing claimants.
It says that it hopes this will discourage people from claiming they are unfit to work to get more money, adding in a report: “The DWP hopes that ‘rebalancing’ the rates by increasing the standard allowance and reducing the LCWRA element will “remove the incentive for people to declare themselves unable to work in order to improve their incomes”. It further notes that “work is the best route out of poverty.”
Universal Credit was introduced by the Conservative-Lib Dem coalition government in 2012, as a means-tested benefit for working age households.
The benefit is paid to both those who are unemployed and those who are working but need an income top up.
