Some claimants will need to take action by January 5
Millions of people across the UK will be affected by a series of key changes to universal credit in 2026. With adjustments aimed at improving support for claimants these reforms could affect everything from payment amounts to eligibility criteria.
Some of these changes will come as good news with the standard allowance set to rise and the two-child limit being scrapped. Other payments are set to reduce for some people as DWP makes moves to rebalance the health element of the benefit while some claimants need to take immediate action by January 5 to avoid being moved onto the lower rate. Don’t miss a court report by signing up to our crime newsletter here.
Here’s what you need to know about the upcoming shifts and how they might affect your finances.
Universal credit standard allowance to rise by a 6.2%
The UK Government announced an increase in universal credit payments as part of the autumn Budget announcement in November.
Benefits typically rise with inflation annually but Rachel Reeves confirmed an additional 2.3% increase to universal credit from April 2026.
This means a single claimant will receive an extra £6 per week, or £312 per year, resulting in an overall above-inflation rise of 6.2%.
The Universal Credit Act 2025 mandates that the benefit will be increased by more than inflation each year until 2030.
Two-child limit scrapped
The UK’s two-child benefit limit is set to be scrapped in April 2026.
The two-child cap prevents households on universal or child tax credit from receiving payments for a third or subsequent child born after April 2017.
The leak of a key document spelling out the UK Government’s plans occurred just before the Budget confirmed the expectation the chancellor would scrap the controversial benefit.
Health element rebalancing (two-tier system)
The DWP said it will focus on the rebalancing of universal credit health and standard elements. This means:
- Increasing the universal credit standard allowance above inflation for the next four years – worth an estimated £725 by 2029-30 for a single adult aged 25 or over.
- Reducing the health top-up for new claims to £50 per week from April 2026.
- Ensuring that all existing recipients of the universal credit health element – and any new claimant meeting the severe conditions criteria and/or that has their claims considered under the special rules for end of life (SREL)–- will receive the higher universal credit health payment after April 2026.
- Exemptions from reassessment for those with the most severe lifelong conditions.
Action needed if you have a long-term health condition or a disability
If you have a severe condition and receive the higher health element you need to report your condition by January 5, 2026, to ensure you’re covered by current rules or you risk being moved to the lower rate from April 2026, according to Citizens Advice.
Other DWP changes to be aware of in 2026
New state pension rates
The basic and new state pension will be increased by 4.8%, from April 2026 in line with average weekly earnings up to an additional £575 per year to pensioners depending on their entitlement.
Someone on a full new state pension will see their weekly payment rise to £241.30 per week while someone on the full basic state pension will see their weekly payment boosted to £184.90 per week.
In 2025 the UK Government said it will continue its commitment to the triple lock for the duration of this parliament.
The triple lock guarantees that the state pension increases annually by the highest of inflation, average earnings growth, or 2.5%.
Certain benefits rise by 3.8%
Inflation-linked benefits and tax credits will rise by 3.8% from April 2026 in line with the annual increase in the consumer prices index (CPI) rate of inflation for September 2025. Those that will rise by this amount are:
- Disability living allowance (DLA)
- Personal independence payment (PIP)
- Attendance allowance
- Tax credits
PIP review
The DWP recently confirmed no changes to PIP will be applied until after a “comprehensive review” of the disability benefit has concluded, expected to be completed by next autumn.
Minister for social security and disability Sir Stephen Timms will chair the Timms Review alongside Sharon Brennan and Dr Clenton Farquharson CBE and it will be co-produced with disabled people, the organisations that represent them, and other experts.
Additionally 12 members of the public will be selected to join the co-chairs.
Get daily breaking news updates on your phone by joining our WhatsApp community here. We occasionally treat members to special offers, promotions and ads from us and our partners. See our Privacy Notice.
