In a major step toward improving the UK’s welfare system, the Department for Work and Pensions (DWP) has announced an annual £725 increase to the Universal Credit (UC) standard allowance by the 2029–2030 financial year.
The phased rise is part of the government’s welfare reform bill, designed to support low-income households amid the ongoing cost-of-living crisis.
Beginning in April 2026, this uplift marks one of the most substantial real-terms income boosts for claimants since Universal Credit was introduced. Here’s everything you need to know.
What Is the £725 Universal Credit Increase?
The proposed uplift aims to increase the standard allowance for single adults aged 25 and over by £725 per year by 2029–30. This is approximately £250 more than they would have received if payments had only risen in line with inflation.
Unlike a lump-sum increase, the raise will be phased in gradually over four financial years, ensuring it remains fiscally sustainable while still providing meaningful support to those in need.
Who Will Benefit?
Nearly 4 million households are expected to gain from these above-inflation adjustments. The main beneficiaries include:
- Single adults aged 25 and over on Universal Credit
- Households without health-related additions
- Individuals relying on UC as their primary or supplementary income
The policy deliberately focuses on groups without additional health conditions, whose benefit rates have not seen real-term increases in recent years.
Year-by-Year Breakdown of the £725 UC Increase
Here’s how the Universal Credit uplift will be distributed over time:
| Financial Year | Projected Annual Increase | Details |
|---|---|---|
| 2026–2027 | £180–£200 | Initial stage of above-inflation increase |
| 2027–2028 | £360–£400 | Second year, building cumulatively on the previous rise |
| 2028–2029 | £540–£580 | Continued phased adjustment to support households |
| 2029–2030 | £725 | Full implementation for eligible claimants |
This structured increase allows claimants to better plan finances while gradually adapting public spending.
Changes to Health-Related Benefits and PIP
The welfare bill includes additional reforms beyond the UC increase:
Limited Capability for Work and Work-Related Activity (LCWRA)
- Current support: Around £390 per month
- From April 2026: New applicants will receive a flat £50 per week
- Existing claimants with severe health conditions will retain full support, adjusted for inflation
PIP (Personal Independence Payment) Eligibility
- New rule from November 2026: Claimants must score at least 4 points in one daily living activity to qualify
- Existing recipients: Not affected; will continue under current rules
These changes aim to streamline support while prioritizing assistance for those with the most significant needs.
Government Support Measures
To accompany the reforms, the DWP is expanding access to employment support:
- 1,000 “Pathways to Work” advisers to be deployed nationwide
- Dedicated work coaches for new LCWRA claimants
- Support includes job search help, skills training, and health services integration
These efforts aim to reduce long-term benefit dependency by encouraging a return to work where feasible.
Key Reform Dates to Watch
Understanding the rollout timeline is essential:
| Date | Reform |
|---|---|
| April 2026 | Start of UC uplift; new LCWRA support rates |
| November 2026 | New PIP eligibility rules apply to new applicants |
| 2027–2029 | Continued increases in UC standard allowance |
| 2029–2030 | Full £725 annual boost realized |
These reforms form part of the government’s broader “Get Britain Working” initiative.
Comparison of Current vs 2026+ Changes
| Category | Current Provision | From 2026 Reforms |
|---|---|---|
| UC Standard Allowance (25+, single) | Base amount + inflation | £725 annual boost by 2029/30 |
| UC Health Top-Up (LCWRA) | ~£390/month | £50/week (new claims only) |
| PIP Daily Living Component | Flexible eligibility | Minimum 4 points required (new claims) |
| Employment Support | Limited | 1,000 work advisers across the UK |
The £725 Universal Credit increase is a significant step toward strengthening the UK’s welfare safety net. By focusing on single working-age adults and gradually raising payments beyond inflation, the DWP aims to deliver real income growth and greater stability for low-income households.
While some aspects of the reform, like reduced health top-ups for new claimants and stricter PIP criteria, may raise concerns, the government’s investment in employment advisers and phased adjustments shows a focus on long-term sustainability and empowerment.
As the cost of living remains a pressing issue, this policy change offers much-needed support—but staying informed about the changes is crucial for every claimant.
FAQs
When will the £725 Universal Credit increase begin?
The increase begins in April 2026 and will be phased in over four years until 2029–30, when the full uplift is realized.
Who qualifies for the £725 increase?
Single adults aged 25 and over on Universal Credit without health-related components are the primary beneficiaries of the uplift.
Will existing PIP and LCWRA claimants lose benefits?
No. Current recipients of PIP and LCWRA with serious health conditions will retain their higher support rates, adjusted for inflation.