Changes to Universal Credit rates from April 2026

Universal Credit (UC) awards are calculated by working out a claimant’s maximum entitlement. This comprises a ‘standard allowance’ – the basic amount for the adult(s) in the household – plus additional elements for different needs and circumstances. It can include an element for people who have been found to have a ‘limited capability for work and work-related activity’ (the ‘LCWRA element’) because of a disability or health condition.

The government says claimants are struggling to get by on the existing standard allowance, and that the high relative rate of the LCWRA element creates “perverse” incentives for UC claimants to be found to have LCWRA. Once people are on the LCWRA element, the government argues, they are no longer routinely supported or encouraged to work, and people in this group move into work at low rates.

Changes from April 2026

The Universal Credit Act 2025 legislated for changes which will ‘rebalance’ UC rates from April 2026 by increasing the basic standard allowance that all claimants receive, while reducing the additional payments for most claimants newly found to have disabilities and health conditions that affect their capability for work. The main changes to the UC rates (PDF) are:

• Increasing the Universal Credit standard allowance above inflation over the four financial years from 2026/27. By 2029/30, the UC standard allowance will be 4.8% higher than it would have been under the normal practice of increasing the standard allowance in line with Consumer Prices Index (CPI) inflation over the period.
• Reducing the LCWRA element by approximately half for most claimants newly entitled to it, from £432.27 a month to £217.26 a month, which will then be frozen in each year to 2029/30.
• Creating a ‘protected’ cohort of existing LCWRA element recipients and new claimants who are terminally ill or have severe, lifelong conditions and are never expected to work.
  • The protected group will see the combined rate of their UC standard allowance and health element increase at least in line with inflation in each year from 2026/27 to 2029/30.

The Department for Work and Pensions (DWP) hopes that ‘rebalancing’ the rates (PDF) in this way will “remove the incentive for people to declare themselves unable to work in order to improve their incomes” and “would benefit society through increased employment”. It further notes that “work is the best route out of poverty”.

These changes amend and override the usual annual practice of reviewing and uprating benefit levels for the specific UC rates listed above. They do not change the rates of other UC elements which will continue be subject to the usual annual uprating process and will be covered by the Commons Library in other briefings.

Effect and savings

Compared with the protected cohort, most new LCWRA recipients from 6 April 2026 will have significantly lower awards from combined standard allowances and LCWRA elements. For single claimants aged 25 or over, awards will be around £2,700 a year lower in 2029/30 than for the protected cohort.

The DWP’s impact assessment estimates that 750,000 claimants will receive the new, lower, LCWRA element in 2029/30. 2.17 million claimants will receive the protected rate in 2029/30, although the proportion of protected claimants will fall in subsequent years.

All households on UC except those with a protected LCWRA element will benefit from the above-inflation increases to the standard allowance.

Over the five years of the forecast to 2029/30, the changes are not expected to save money. However, in the later years of the forecast and in the longer term, reductions to the LCWRA element are expected to result in savings.

Effect on poverty levels

Government analysis suggests that social security policy changes, including to Universal Credit rates, will result in 50,000 fewer individuals in relative poverty after housing costs in 2029/30.

However, some commentators and MPs have criticised the government for including the cancellation of changes to the Work Capability Assessment planned by the previous Conservative government in its poverty calculations.

Debate and reaction

Before the government legislated for the ‘rebalancing’ of UC rates, a range of thinktanks and campaigning organisations had noted that the low UC standard allowance may incentivise claimants to try to qualify for the health-related additions.

A coalition of charities and campaigners have argued that the changes “will increase hardship among disabled people and their families”, who often “already face disproportionately high levels of hardship”.