Universal Credit payments will increase by 3.8% from April 2026, the DWP has confirmed, in line with September’s inflation rate
One of the key decisions confirmed at last week’s Autumn Budget was the rate at which DWP benefits, including Universal Credit, will increase in April. The rate of benefits rises every April in line with the inflation rate from the previous September – a figure that is confirmed annually at the Budget.
The precise increase in state benefits for next year was established following the release of the latest inflation data by the Office for National Statistics. UK inflation remained steady at 3.8 percent in September – despite most economists and the Bank of England predicting an inflation rise to 4 percent.
Ms Reeves was tasked with the challenging job of addressing a £50 billion deficit in the country’s public finances this year. Prior to the Budget, Ms Reeves stated her primary objectives were to reduce living costs, cut NHS waiting times, and decrease public spending.
However, she has faced considerable criticism for raising taxes and reducing ISA limits.
Speculation had been rife about how the Chancellor intended to make savings this year, with a proposed income tax increase making news in recent weeks. However, earlier this month, she abandoned plans to raise the headline rate of income tax – a move that would have violated a Labour manifesto promise – after receiving economic forecasts that were not as bleak as initially anticipated, reports the Manchester Evening News.
The Government is obliged to annually review benefit levels to ensure they keep pace with the rise in general prices. Typically, inflation for the year leading up to September has been the benchmark used.
This proved disadvantageous for recipients this April when Universal Credit, Personal Independence Payment, Carer’s Allowance, Income Support, Housing Benefit or Jobseeker’s Allowance increased by a mere 1.7 percent – reflecting the rate of inflation in September 2024.
However, by April this year, the same measure of living costs had surged to 3.8 percent. The September inflation figure is anticipated to be a peak and is likely to decrease by next April, based on current projections.
Universal Credit, a means-tested benefit, was initially introduced in the UK in 2013 to replace old benefits. By 2018, all new claimants were required to apply for UC, while existing legacy benefit recipients continued receiving their awards.
Outlined below are the confirmed new monthly rates for Universal Credit set to take effect from April 2026, as announced at the Budget.
Increases in Universal Credit payments
Standard allowance
Single
- Single under 25 from £316.98 to £338.58
- Single 25 or over from £400.14 to £424.90
Couple
- Joint claimants both under 25 from £497.55 to £528.34
- Joint claimants, one or both 25 or over from £628.10 to £666.97
Child amounts
- First child (born prior to April 6, 2017) from £339.00 to £351.88
- First child (born on or after April 6, 2017) or subsequent children from £292.81 to £303.94
Disabled child additions
- Lower rate addition from £158.76 to £164.79
- Higher rate addition from £495.87 to £514.71
Limited Capability for Work
- Limited Capability for Work amount from £158.76 to £158.76
- Limited Capability for Work and Work-Related Activity amount from £423.27 to £217.26
- Limited Capability for Work and Work-Related Activity amount (Pre-2026 claimant, severe conditions criteria claimant or claimant who is terminally ill) from £423.27 to £429.80
Carer amount
- Carer amount from £201.68 to £209.34
Childcare costs amount
- Maximum for one child from £1031.88 to £1071.09
- Maximum for two or more children from £1768.94 to £1836.16
Housing cost contributions
- Non-dependants’ housing cost contributions from £93.02 to £96.55
Work allowances
- Higher work allowance (no housing amount) – One or more dependent children or limited capability for work from £684.00 to £710.00
Lower work allowance
- One or more dependent children or limited capability for work from £411.00 to £427.00
