DWP gives 4 million households £295 Universal Credit boost from today

Around four million households are set to benefit from an increase in Universal Credit payments starting Monday, April 6, as part of a wider government effort to ease the ongoing cost of living pressures.

The Department for Work and Pensions (DWP) has announced a rise in the standard Universal Credit allowance for the 2026–27 financial year. The changes mean claimants will receive an additional £295 annually at the basic rate, with projections suggesting this could grow to £760 extra per year by the end of the decade.

Data from Save the Children highlights that 59% of Universal Credit recipients are currently employed, underlining the importance of the benefit in supporting low-income working households.

Under the updated rates, a single person under 25 will see their monthly payment increase from £316.98 to £338.58, while those aged 25 and over will receive £424.90, up from £400.14. Couples will also see increases, with under-25s rising from £497.55 to £528.34, and over-25s from £628.10 to £666.97 per month.

However, alongside these increases, the government is introducing cuts to the Universal Credit Health Element. For new claimants, this payment will be reduced significantly—from £429.80 to £217.26 per month—as part of efforts to control rising welfare costs, particularly those linked to health-related claims.

In another major reform, the long-standing two-child benefit cap is being removed. This means families can now receive the Child Element for more than two children. Currently, the benefit provides £351.88 per month for the first child and £303.94 for each additional child, though total payments remain subject to the overall household benefit cap.

The DWP said the reforms are part of a broader plan to “rebalance” Universal Credit by increasing core payments while reducing reliance on additional health-related support. Officials estimate that households could see an average income boost of up to £725 a year by 2029/30.

The department also noted that this marks the first time the standard allowance will rise permanently above inflation, describing it as the most significant real-terms increase in out-of-work support since 1980, based on analysis by the Institute for Fiscal Studies.

The government says the changes aim to create a fairer system that encourages employment while continuing to support those in need.