Millions of households across the UK are set to receive a significant financial boost after a major rule change for Universal Credit was announced in the government's Autumn Budget.
Inflation-Beating Payment Increase
Chancellor Rachel Reeves has revealed that Universal Credit claimants will receive an extra payment of up to £465 per year starting from April 2026. This represents a substantial increase above the standard inflation-linked rise.
Typically, Department for Work and Pensions (DWP) benefits increase each April in line with the previous September's Consumer Price Index (CPI), which would have meant a 3.8% rise this year. However, the government is implementing an additional top-up to the Universal Credit Standard Allowance, delivering an inflation-busting rise of 6.2% for both individual claimants and couples.
How Much Extra Will You Receive?
The Treasury has confirmed the specific amounts claimants can expect from this change. For a single person aged 25 or over, payments will increase by approximately £295 per year. For couples where one partner is aged 25 or over, the increase will be around £465 per year.
According to budget documents published on Wednesday, November 26, this means single claimants will receive over £110 more than if the benefit had only been up-rated by inflation, while couples will get approximately £180 more than the inflation-only increase would have provided.
Broader Changes to the Benefits System
This payment boost coincides with the government's decision to scrap the two-child benefit cap, which previously limited the amount of Universal Credit enhancement a claimant could receive if they had more than two children.
However, the budget also introduced changes that will affect some claimants negatively. The government plans to cut the Limited Capacity for Work Related Activity (LCWRA) payments in half for new claims while freezing the current rate for existing claimants.
The DWP has stated that this rebalancing of rates, by increasing the standard allowance while reducing the LCWRA element, is intended to remove the incentive for people to declare themselves unable to work simply to improve their incomes. A government report emphasised that work is the best route out of poverty.
Universal Credit was first introduced by the Conservative-Lib Dem coalition government in 2012 as a means-tested benefit for working-age households. The benefit supports both unemployed people and those in employment who require additional income support.
