The UK’s Department for Work and Pensions (DWP) has announced upcoming changes to Universal Credit, set to take effect in April 2026. The reforms, part of the Universal Credit Act 2025, aim to adjust financial support for those who rely on the benefit.
According to the Manchester Evening News, nearly four million households will see an increase in their annual income. This adjustment follows a broader effort to address gaps in the welfare system and improve support for individuals facing financial challenges. Over the coming years, these changes will impact various aspects of the Universal Credit structure. Let’s explore the details.
A Landmark Increase in Universal Credit Payments
For many who rely on Universal Credit as a vital lifeline, the news is certainly encouraging. The Universal Credit Act 2025, which was recently granted Royal Assent, promises the highest permanent increase to the main rate of out-of-work support since 1980. According to the Institute for Fiscal Studies (IFS), this increase will be an essential part of the government’s strategy to tackle poverty and encourage self-sufficiency.
The increase will see the Universal Credit standard allowance rise above inflation for the next four years. For a single adult aged 25 or older, this increase is expected to be worth £725 by 2029/30. This means more support for individuals struggling to make ends meet, especially in times of economic instability. As the DWP stated,
This means they can live with dignity and security, knowing the reforms to the welfare system mean it will always be there to support them.
Along with this increase, approximately four million households will see their annual income rise, providing much-needed financial relief. This reform is designed to address a “fundamental imbalance” in the system, which has, in some cases, led to dependency on benefits rather than empowerment and work opportunities.
Health Top-Up Reduction and New Reforms
While there’s much to celebrate, there are also some key changes that may raise concerns for certain groups. One of the major alterations is the reduction of the Universal Credit health top-up for new claims. Starting in April 2026, the health element will be reduced to £50 per week for new claimants. This change could impact those with health conditions or disabilities who were previously receiving a higher amount of support.
However, the DWP has reassured that this change will not affect everyone. 200,000 individuals in the “Severe Conditions Criteria” group, including those with the most severe, lifelong conditions, will not be reassessed for Universal Credit eligibility.
Additionally, existing recipients of the health element, along with new claimants who meet the Special Rules for End of Life, will continue to receive the higher payment. For those who are eligible, the DWP will combine the health element with the standard allowance, ensuring that both increase at least in line with inflation every year from 2026/27 to 2029/30.
DWP added:
We will be engaging widely over the summer to design the process for the review and consider how it can best be co-produced to ensure that expertise from a range of different perspectives is drawn upon.
A £3.8 Billion Investment in Employment Support
One of the most striking elements of the Universal Credit Bill is the £3.8 billion investment in employment support for disabled and sick individuals. This funding will be used to provide tailored support that helps people with health conditions find suitable work. As part of this initiative, the DWP is expanding its Pathways to Work programme, which offers one-on-one assistance to people who feel ready to work but need extra support.
DWP further explained:
These reforms are underpinned by a major investment in employment support for sick and disabled people – worth £3.8 billion over the Parliament. Funding will be brought forward for tailored employment, health and skills support to help disabled people and those with health conditions get into work as part of our Pathways to Work guarantee – They added,
This investment will accelerate the pace of new investments in employment support programmes, building on and learning from successes such as the Connect to Work programme, which are already rolling out to provide disabled people and people with health conditions with one-to-one support at the point when they feel ready to work.
However, critics like Thomas Lawson, CEO of Turn2us, have expressed concerns about the overall impact of these reforms. Lawson noted that MPs had voted to reduce support for those unable to work by over £200 a month. He believes that halving the health element of Universal Credit for those who become sick from April 2026 will lead to increased hardship, forcing more people to go without essentials. Lawson commented:
MPs voted to reduce support for people unable to work by over £200 a month. Halving the health element of Universal Credit for anyone who becomes sick from April 2026 will increase hardship and mean even more people are going without essentials.
Lawson continued,
To build a system we can all trust, the government now needs to review the whole system and really listen to disabled people and organisations like ours. In a country as wealthy as ours, sickness should never mean hunger or eviction.
