Four million on Universal Credit to get inflation-busting boost of £725 as huge shake-up confirmed – are you eligible?

MILLIONS of households on Universal Credit will receive a set of inflation-busting benefit boosts, starting next April.

Around four million households will see their standard allowance rise by £725 in cash terms by 2030.

It comes as the Universal Credit Bill received Royal Assent this week, meaning it’s now become law.

The standard allowance is the basic payment for households on Universal Credit.

Currently, single people under 25 receive £316.98 a month and couples under 25 get £497.55 a month.

Meanwhile, single people over 25 get £400.14 a month and couples aged 25 or older receive £628.10 a month.

Benefits usually go up each spring to help households keep up with the rising cost of living, including food, fuel, and household bills.

These increases typically match the consumer price index of inflation from the previous September.

However, the government claims the four-year benefit freeze from 2015 to 2019 has caused millions of payments to fall behind.

As a result, from April 2026, it will hike the standard allowance by more than inflation over the next four years.

This means that by 2030, the amount a claimant receives will be almost 5% higher than if it had only risen to match inflation.

The increases will be worked out by adding the inflation rate from the previous September, plus an extra fixed boost.

These extra percentages will be set at:

• 2.3% for 2026-27
• 3.1% for 2027-28
• 4.0% for 2028-29
• 4.8% for 2029-30

The government wants to help more people return to work and rely less on incapacity benefits.

What else is changing on Universal Credit?

Earlier this summer, Prime Minister Keir Starmer had been hoping to push through welfare reforms that would have seen a crackdown on payments to some benefits claimants.

However, the government was forced into a U-turn on its welfare bill in July, following outrage from charities, experts and MPs.

The proposed changes included a shake-up of the health element of Universal Credit.

More than three million Universal Credit recipients don’t have to find work due to their poor health.

A single person who is aged 25 or over can receive the basic level of the benefit, which comes in at £400.14 every month.

But those getting an incapacity top-up due to a disability or long-term condition can get an extra £422.37 – more than double the original payment. 

Ministers had tried to freeze the payment for the next four years but a commitment has been made for it to go up with inflation.

That means people claiming the health element of Universal Credit and new claimants with the most severe conditions will see their incomes protected in real terms.

Existing claimants will get £97 per week until the end of the decade. 

However, new claimants from April 2026 will see the health element drop from £97 a week to £50 a week – an almost 50% cut.

What were the proposed changes to PIP?

The reforms would also have seen disabled Brits facing stricter tests for claiming Personal Independence Payment (PIP).

The Government had proposed that people would need to score four points in one task such as washing and dressing to qualify for support. 

Currently they can qualify with eight points across multiple activities. 

But following the rebellion by Labour MPs, the proposal was scrapped entirely. 

It means no changes are going to be made until after a further review has taken place.

Debbie Abrahams, chair of the Work and Pensions Committee, previously said: “We welcome the concessions that the Government made to the UC and PIP Bill (now the UC Bill); but there are still issues with these welfare reforms not least with the cut in financial support that newly sick and disabled people will receive.” 

“The Government’s own analysis published in March indicates that from next April approximately 50,000 people who develop a health condition or become disabled – and those who live with them – will enter poverty by 2030 as a result of the reduction in support of the UC health premium.”

“We recommend delaying the cuts to the UC-health premium, especially given that other policies that such as additional NHS capacity, or employment support, or changes in the labour market to support people to stay in work, have yet to materialise.”