Warning for millions of households on Universal Credit missing out on £404 a year – check how your payments are affected
UNIVERSAL credit claimants are missing out on a huge £404 a year, a leading charity has warned.
Citizens Advice analysis shared with The Sun found that if the standard allowance of Universal Credit had been raised in line with inflation since 2014, single claimants would be £34 a month better off.
Currently, the standard allowance for people over the age of 25 is £400.14 a month.
Had Universal Credit been raised in line with inflation each year, single claimants would be given £434.14 a month.
Universal Credit and most other benefits are meant to rise in line with inflation each year but this isn't always exactly the case.
If this had happened, couples aged 25 and over would be £53 a month better off, or a huge £635 a year.
Read more on Universal Credit
They currently get £628.10 a month, but they would be getting £618.10.
This means the value of Universal Credit payments has actually reduced since they were first introduced.
This is thanks to a series of freezes and below-inflation increases implemented by previous governments over the years.
For example, benefit payment levels were frozen between 2016 and 2020, affecting 27million people.
The Government increased Universal Credit payments by 1.7% this month, basing the rise on September's inflation figure.
But the increase still doesn't cover the amount the benefit payment should have risen by if it had been raised in line with inflation since 2014.
The Sun has contacted the Department for Work and Pensions (DWP) for comment.
The current Labour Government had pledged in its election manifesto last year that it would review the Universal Credit system.
But Citizens Advice has said it is "concerned" the review won't look at raising the level of Universal Credit payments sufficiently.
The Government recently proposed increasing the standard allowance in the coming years beyond the rate of inflation.
For a single person aged 25 and over, this will result in a £7 weekly rise from April 2026 - an increase from the current £91 per week to £98 per week.
By 2029, the DWP estimates that above-inflation increases will boost the average claimant's standard allowance by £775 in cash terms compared to inflation-only rises.
Similar percentage increases will be applied to the standard allowance for those under 25 and couples.
This is part of a disability benefits green paper released this spring.
But Citizens Advice says that by 2029 the payments will still be £15 a month lower for single claimants, and £23 a month lower for couples, than if the payments had risen in line with inflation since 2014.
Am I entitled to Universal Credit?
According to the GOV website, if you're on a low income or need help with your living costs, then you could be entitled to Universal Credit.
To claim, you must live in the UK, be aged 18 or over (with some exceptions if you're 15 to 17), be under State Pension age, and have £16,000 or less in money, savings and investments.
Other circumstances are if you are out of work, or unable to work, for example because of a health condition.
Citizens Advice also warned the changes would not offset cuts to benefit payments for disabled people.
Chancellor Rachel Reeves announced in her Spring Statement that changes would be made to the health component of Universal Credit, known as the Limited Capability for Work Related Activity payment.
The changes are set to be introduced in April next year, and mean existing claimants will see their payments frozen at the current rate of £416.19 until 2029-30.
New claimants will have the amount almost halved to £50 a week from the 2026-27 tax year, and frozen at this level until 2029-30.
The Government has said it wants to "rebalance" the income-related benefits system from support targeted on disabled people, to support for general living costs.
The proposals will see around 800,000 people losing an average of £4,500 per year in Personal Independence Payment (PIP) income, as well as Universal Credit income of another £5,000 per year.
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Citizens Advice said: "While the planned uplift is welcome, it doesn't even get us back to where Universal Credit started from.
"The review must address this and go further on the standard allowance than what is proposed in the disability benefits green paper."
How much Universal Credit can you get?
TRYING to work out how much Universal Credit you can get can be overwhelming.
There are so many different elements that can affect your claim and it makes the whole process even more complicated.
There are several free calculators that you can use to help you get an estimate, such as Gov.UK, Citizen's Advice, MoneySavingExpert, StepChange and Turn2Us.
You will need:
- Details of all your income, such as existing benefits, tax credits, earnings from employment and your pensions,
- Details of your partner's income if you're married, in a civil partnership or living with someone as a couple. You will be assessed as a couple
- Information on any savings you have,
- How much you pay in council tax per year, and whether you get any discounts, reductions or exemptions,
- Details of your rent or mortgage payments,
- Employment and income information about anyone else living with you, such as grown-up children,
- Details about your carer's allowance if you receive it.
You'll need to make sure that the information provided is as accurate as possible to get the truest estimate.