Next year, significant changes are on the horizon for Universal Credit, a benefit program utilized by over eight million individuals in the UK and administered by the Department for Work and Pensions (DWP). These changes involve an increase in the standard allowance, which serves as the base payment in Universal Credit before any adjustments are applied. However, there are impending reductions in the health-related component for new claimants of Universal Credit.
The transition to Universal Credit is gradually replacing various older benefits such as Tax Credits, Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, and Housing Benefit. By March 2026, the migration to Universal Credit is expected to be complete for all eligible individuals, with legacy benefits being phased out.
Under the upcoming adjustments, the standard allowance in Universal Credit is set to rise by 6.2% starting from April, exceeding the inflation rate. For instance, the standard allowance for a single person aged 25 and above will increase from £92 to £98 per week, while for couples, it will rise from £145 to £154 per week. The DWP forecasts that by 2029, incremental increases will augment the average standard allowance by £775 in nominal terms.
Moreover, the Limited Capability for Work and Work-Related Activity (LCWRA), a component that offers supplementary payments to individuals with health issues or disabilities limiting their work capacity, is undergoing modifications. As of April 2026, new claimants awarded LCWRA will receive £50 per week, down from the current £97 weekly. This rate will remain static until 2029/30. Existing claimants will continue to receive £97 per week until 2030, without any annual escalations. Eventually, by 2030, the LCWRA element will be phased out and replaced by a new health element linked to PIP.
Additionally, a new subgroup within the LCWRA, called the Severe Conditions Category (SCC), will be introduced in April 2026 for individuals with severe, lifelong disabilities and illnesses. Members of the SCC will receive the current higher rate of the LCWRA element and will be exempt from routine reassessments. Assessment criteria will focus on the impact of the condition on the individual rather than solely on the condition itself.