Universal Credit rates are changing in April – millions could see income drop by hundreds

PMQs: Boris Johnson grilled by Blackford on Universal Credit

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April is the time when annual increases to Department for Work and Pensions (DWP) payments come into force – from the state pension to legacy benefits. This April, Universal Credit is set to rise by 0.5 percent, in line with the Consumer Price Index (CPI).

However, it’s not necessarily going to be the case that Universal Credit claimants will therefore get more each month from April.

This is because the Government is yet to confirm whether or not the rumoured extension to the current Universal Credit uplift will remain in place.

Last year, charities and campaigners began their calls on the Government to make the uplift permanent.

In March 2020, the Chancellor of the Exchequer Rishi Sunak announced a temporary one-year uplift to both Universal Credit and Working Tax Credit.

“To strengthen the safety net, I’m increasing today the Universal Credit standard allowance, for the next 12 months, by £1,000 a year,” he said.

“For the next twelve months, I’m increasing the Working Tax Credit basic element by the same amount as well.”

The increase works out at around £20 extra per week, or £80 per month.

However this temporary boost is currently set to end from April 2021.

It is thought the Chancellor may address the matter of the uplift on Wednesday, when he gives his Spring Budget statement in the House of Commons.

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Myron Jobson, Personal Finance Campaigner at interactive investor, commented: “The impact of the on household finances have widely documented, and there are fears that the nation’s most vulnerable will plunge off the financial cliff edge when the £20 per week increase in Universal Credit (UC) and Working Tax Credit, introduced to support families during the coronavirus pandemic, comes to an end in April.

“The Work and Pensions Committee has recently called for year-long extension of increase ‘at the very least’.

“It notes since March the number of people claiming UC has doubled to around million, while job vacancies remain far below pre-pandemic levels.

“It is difficult to envisage a significant change of their financial circumstances to warrant the loss of the coronavirus top-ups come May.”

How much is Universal Credit?

As well as the standard allowance, certain people can get extra amounts.

This is if they:

  • Have children
  • Have a disability or health condition which prevents them from working
  • Need help paying your rent.

A person can use an independent and free benefits calculator online to see how much they may be able to get.

It’s important to be aware the benefit cap and earnings can affect the total amount of benefit a person receives.

Universal Credit standard allowance

Currently, the monthly standard allowance is as follows:

  • Single and under 25 – £342.72
  • Single and 25 or over – £409.89
  • In a couple and both people are under 25 – £488.59 (for both)
  • In a couple and either person is 25 or over – £594.04 (for both).

Universal Credit 2021 to 2022 rates

With the uplift set to end from April 2021, the DWP has published details on what the rates would be including the 0.5 percent increase, and without the 2020 to 2021 uplift.

  • Single under 25 – £257.33
  • Single 25 or over – £324.84
  • Joint claimants both under 25 – £403.93
  • Joint claimants, one or both 25 or over – £509.91.

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