According to the DWP’s Green Paper published today, the government will be increasing the standard allowance – alongside the usual annual rises – starting next April
Today the government confirmed that the Standard Allowance for Universal Credit claimants would see a “permanent above inflation” rise which equates to a £775 hike in cash terms by 2029-30.
Under the current Universal Credit system, there is no set level for how much money you get every month. What you get depends on your personal circumstances, including age, whether you live in a couple, and whether you have children.
However, there is a base rate for the benefit, and that’s called the “standard allowance”. Then, if you’re eligible, you can get additional payments to support other costs. These are all applied to give your total figure before any deductions are then made based on whether you work, have savings, and other measures. These rates are rising from April 2025, and below is the current rate – alongside what it will rise to next from next month:
- Single under 25: £311.68 a month to £316.98 a month
- Single 25 or over: £393.45 a month to £400.14 a month
- Joint claimants both under 25: £489.23 a month to £497.55 a month
- Joint claimants, one or both 25 or over: £617.60 a month to £628.10 a month
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According to the DWP’s Green Paper published today, the government will be increasing the standard allowance – alongside the usual annual rises – starting next April. In 2026-27, the standard allowance rate for those over 25 will rise by £7 a week from next year taking it from £91 per week to £98 per week. This will cover both existing and new claims for Universal Credit. They will then continue to rise until 2029-30. According to Kendall, this will equate to an extra £775 by 2029-30.
Kendall says the increase is needed as previous benefit freezes by the former Tory government had made the system unbalanced. According to the Green Paper, benefit changes over the last decade or so have made the health element of Universal Credit “relatively more attractive”
It explained: “The rate of Universal Credit for those on the health element is now double that for those on the standard allowance. A series of benefit freezes and benefit increases at a lower rate than inflation has left the value of the standard allowance at a 40-year low by the early 2020s, contributing to hardship and destitution.
“The value of the standard allowance (or its pre-UC equivalent) has fallen from around 40% of full time earnings at the minimum wage at the turn of the century to less than 25% of the same at the National Living Wage today.”
Currently, the health support available through Universal Credit – which is called the limited capability for work and work-related activity (LCWRA) payments – is worth £416.19 per month. Labour noted that this – in addition to – and is more than the £393.45 per month for the standard allowance.
The standard allowance did not rise between 2015 and 2019, when the former Tory government froze benefit uplifts. Although, the freeze did not include the LCWRA element.
Kendall told the House of Commons today: “The Tories ran down the value of the universal credit standard allowance. As a result, the health top-up is now worth double the standard allowance at more than £400 a month, and in 2017 they took away extra financial help for the group of people who could prepare for work.
“So we’re left with a binary assessment of can or can’t work, and a clear financial incentive to define yourself as incapable of work, something the OBR, IFS and others say is a likely factor driving people on to incapacity benefits.
“Today, we tackle this problem head on. We will legislate to rebalance the payments in universal credit from April next year, holding the value of the health top-up fixed in cash terms for existing claimants, and reducing it for new claimants, with an additional premium for people with severe lifelong conditions that mean that they will never work to give them the financial security they deserve.
“And alongside this, Mr. Speaker, we will bring in a permanent above-inflation rise to the standard allowance in universal credit for the first time ever, a £775 annual increase in cash terms by 2029-30 and a decisive step to tackle the perverse incentives in the system.”
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