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

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).

“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.

Myron Jobson, Personal Finance Campaigner at interactive investor, commented: “The impact of the pandemic on household finances have been 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 six 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.”

A Government spokesperson said: “We are committed to supporting the lowest-paid families and those most in need through the pandemic, which is why we’re spending hundreds of billions to safeguard jobs, boosting welfare support by billions and have introduced the Covid Winter Grant Scheme to help children and families stay warm and well-fed during the coldest months.”

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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