The introduction of the Universal Credit payments, as of 7 April 2025, is in accordance with the 1.7 percent Consumer Prices Index (CPI) inflation rate for September 2024. The adjustment is part of the ongoing government effort that tried, in some way, to keep households in pace with the rising cost of living.
Update on Universal Credit Standard Allowance
The standard allowance, which constitutes the base of Universal Credit payments, has been increased, so for single claimants who are less than 25, the amount has increased from £311.68 to £316.98 per month. For claimants aged 25 years and over, it has increased from £393.45 to £400.14.
For co-joint applicants, both who are under the age of 25, the monthly payment has increased from £489.23 to £497.55. Where at least one is aged 25 and above, the allowance now stands at £628.10 compared to £617.60 earlier.
Increased Additional Elements
Apart from the standard allowance, some additional components have also been raised. For the first child born before April 6, 2017, the amount has increased from £333.33 to £339.00 per month. The amount has increased from £287.92 to £292.81 for any first child born on or after April 6, 2017, or for any subsequent child.
In addition, disabled child additions have improved. The lower rate increased from £156.11 to £158.76, whereas the higher rate increased from £487.58 to £495.87.
The component has been raised from £156.11 to £158.76 for limited-capability claimants. Claimants suffering from limited capability for work with a work-related activity now earn £423.27 instead of £416.19.
The carer element has increased in monthly amounts from £198.31 to £201.68.
Changes in the Work Allowances
Since the work allowances define the amount which a claimant can earn before the reduction in the Universal Credit, such thresholds were revised. The higher work allowance (for those who do not receive housing support) has now gone to £684 from £673. The lower work allowance (for those receiving housing support) went from £404 to £411.
Maximum Support Towards Childcare Costs
A small increase has been made with regard to childcare support through Universal Credit. For one child, the maximum amount has thus gone up from £1,014.63 to £1,031.88 in a month. For two or more children, it has now increased from £1,739.37 to £1,768.94.
Reduced Deduction in the Debt Repayments
To relieve financial pressure on claimants, the DWP has reduced the ceiling on deductions of the progressive Universal Credit payments for debt repayments. It now stands that from April 2025, the maximum to be deducted shall be reduced from 25% to 15% of the standard allowance. In that way, claimants retain more benefit to cater for their living costs.
Impact on Universal Credit Applicants
These changes will provide additional financial support to claimants so that they can better cope with the impacts of inflation and rising living expenditures. Claimants will have to check their monthly statements to see how these new rates will impact their individual payments.
More Help
If claimants require clarification or further help, they are encouraged to use online benefit calculators or contact their local Jobcentre Plus. The enhanced rates are now applicable, being paid from April 2025 onwards.