In a landmark move, the Labour Party has unveiled plans for a significant boost to the Universal Credit (UC) standard allowance, set to provide up to £725 extra to millions of households by 2029/30.
This represents the highest permanent increase to out-of-work support since 1980, marking a pivotal moment in the government’s approach to social welfare.
For the first time ever, the UC standard allowance will permanently rise above inflation, ensuring that claimants receive more than they would based solely on the cost of living. This policy aims to help those who rely on Universal Credit, particularly as inflation continues to place pressure on household budgets.
Key Details of the Universal Credit Increase
The proposed increase will see the UC standard allowance for a single person aged 25 or over reach £725 by 2029/30 in cash terms. According to the Institute for Fiscal Studies (IFS), this represents the most substantial real-terms boost to out-of-work benefits in over 40 years.
Starting from April 2026, the UC standard allowance will rise consistently above inflation for the next four years, a move designed to protect vulnerable individuals from the growing cost of living.
However, alongside the increase, a notable change will take place in the health top-up for new claimants. From 2026, the health element, which provides extra support for those with severe health conditions, will be reduced to £50 per week for new claimants.
Despite this reduction, existing recipients who meet specific criteria, including those with severe and lifelong conditions, will continue to receive the higher health payment.
The government’s focus, as articulated by Work and Pensions Secretary Liz Kendall, is to create a system that offers fairness and opportunity.
“Our reforms are built on the principle of fairness, fixing a system that for too long has left people trapped in a cycle of dependence,” she said.
These measures are intended not only to increase financial support for households but also to create pathways for disabled individuals to enter the workforce without the fear of losing their benefits.
Future Impact on Claimants and Welfare Recipients
The UC boost is expected to have a significant impact on the lives of millions of claimants, particularly those in low-income households. This increase will be felt most acutely by single adults aged 25 and over, who will see their benefits rise substantially above inflation.
The change is part of a broader effort to address growing inequalities and provide a safety net for individuals who are out of work or unable to work due to health reasons.
At the same time, the government’s decision to reduce the health top-up for new claimants from 2026 reflects a balancing act between providing support and ensuring the sustainability of the welfare system.
Although some may see this as a controversial decision, the commitment to maintain the higher health payments for those with severe conditions ensures that the most vulnerable individuals will continue to receive the support they need.
