Millions of UK claimants to receive higher standard allowance by 2029, with reforms also targeting employment support for disabled people. Government outlines new policy direction aimed at fairness, work incentives and improved disability assessment.
Universal Credit to See Permanent Increase
The Department for Work and Pensions (DWP) has confirmed that the Universal Credit standard allowance will rise permanently above the rate of inflation, leading to a £725 cash increase for a single adult aged 25 or over by the 2029/30 fiscal year.
This marks the first time such an inflation-linked increase has been hardwired into future support levels, according to statements released by the DWP.
This policy shift forms part of a broader set of reforms introduced by the new Labour government. According to Work and Pensions Secretary Liz Kendall, the reforms aim to fix a system that “for too long has left people trapped in a cycle of dependence.”
She stated that the changes are designed to promote fairness and provide “a real chance for a better future” for millions of households.
The rise in the standard allowance is a departure from previous uprating mechanisms, which adjusted benefits annually based on past inflation. The DWP’s announcement signals a more proactive approach, embedding a long-term uplift that, in real terms, aims to enhance the purchasing power of benefit recipients and protect them against economic volatility.
Targeted Reforms to Disability Support and Employment Services
Alongside benefit increases, the government has announced a £3.8 billion investment in employment support for people with disabilities and health conditions. This investment will be channelled into the Pathways to Work initiative, intended to offer one-to-one support tailored to each claimant’s readiness and ability to enter the workforce.
A key component of the reform package involves a ministerial review of the Personal Independence Payment (PIP) assessment system.
Led by Disability Minister Stephen Timms, the review will be co-produced with disabled individuals, advocacy organisations, medical experts and other stakeholders. The aim, according to the DWP, is to ensure the process is “fair and fit for the future.”
This collaborative review is set to begin with a nationwide consultation over the summer. It will gather input on how the system can be made more transparent, supportive and conducive to long-term independence.
The government also seeks to remove disincentives for disabled people seeking employment, assuring them that benefit entitlements will not be penalised if employment attempts are unsuccessful.
The Connect to Work programme, which is already active, is cited as an example of the kind of support model the government plans to expand. According to the DWP, it provides “tailored employment, health and skills support” at the point individuals feel ready to engage with the job market.
