The amount was confirmed during the approval of benefit rises for the 2025-2026 financial year
Millions of people relying on Universal Credit are to see a boost of £150, a DWP minister has told the House of Lords.
This will be the average annual gain for a family from the increase in Universal Credit payment rates for the 2025-2026 financial year.
During the discussion of the Social Security Benefits Uprating Order 2025, the House of Lords heard that most DWP benefits would increase by 1.7 per cent in line with the inflation rate from last September.
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Baroness Sherlock, DWP Parliamentary Under-Secretary of State, said: “I turn now to the support given to those in the labour market, such as Universal Credit and the legacy means-tested benefits it replaces.
“The uprating order increases the personal and standard allowances of working-age benefits, including Universal Credit, by 1.7 per cent, in line with the increase in prices in the year to September 2024.
“Around 5.7 million families are forecast to benefit from the uprating of Universal Credit, with an average annual gain for a family estimated to be £150.”
However, some members of the House of Lords said the Universal Credit increase was not enough to cover basic living costs.
Baroness Lister of Burtersett pointed to research from the Joseph Rowntree Foundation which said that basing the increase on the very low inflation figure from September 2024 meant that benefits will actually lose value when the 2025-2026 rise is applied.
Critics have asked for a more recent figure to be used so that benefit rises reflect the present economic climate rather than consumer prices from many months before.
Baroness Lister of Burtersett explained: “Inflation is already at 3 per cent, and we heard of a higher-than-expected energy price cap increase.
“Losing a little value may not sound very significant, but when benefits are so low to begin with, it can make a real difference for families struggling to get by.
“My noble friend the Minister previously raised the long reference period for the uprating, as did the Work and Pensions Committee in last year’s report on benefit levels.
“Disappointingly, the DWP told the committee that even in the longer term, when the migration to Universal Credit is completed, it has no plans to shorten the reference period.”
Baroness Janke also asked whether the benefits rise was adequate. She said: “The 1.7 per cent uprating for other benefits will be of little comfort to the growing numbers in poverty.
“The Joseph Rowntree report has been mentioned already; it tells us that one in five people in the UK – 21 per cent – are in poverty. Of these 14.3 million people, 8.1 million are working-age adults, 4.3 million are children and 1.9 million are pensioners.
“Children, as we have heard, have higher risks of poverty overall, at 30 per cent, versus 21 per cent for the whole population.
“But larger families with three or more children have consistently faced a higher rate of poverty: 45 per cent of children in large families were in poverty in 2022-23.
“That is an appalling indictment of this policy, which Labour Oppositions have criticised so much, as the noble Baroness, Lady Lister, acknowledged. I wonder how long it will take for the Government to abolish it.
“Today’s uprating means that we are looking to approve a basic rate of Universal Credit of £92 a week for a single person aged over 25, and £145 for a couple.
“Yet the Joseph Rowntree Foundation and the Trussell Trust have estimated that at least £120 is needed for a single person, and £200 for a couple, in order to afford even the basic essentials – a shortfall of around £30 a week on the bare minimum needed to survive.
“Shortfalls in the benefit system are key drivers of poverty, depriving people of the basic necessities for survival.
“Specific features have been found to increase the numbers in poverty, including the benefits cap and the two-child limit, and the erosion of the value of Universal Credit means that its standard allowance is now at around its lowest levels as a proportion of average earnings. I, too, support the Joseph Rowntree Foundation on having a basic minimum floor for Universal Credit.
“Another feature is that the capital cut-off for Universal Credit has been frozen since the benefit was introduced. This is a form of taxation by stealth of the least well-off, and it hits hard people in their 50s and 60s who are on benefits, having saved something for later life.
“For example, if they have more than £16,000 in non-pension ISAs, they are disqualified from Universal Credit. I wonder whether this needs to be looked at again.”
Universal Credit payment rates 2025/2026
All amounts are per month, as Universal Credit is a monthly benefit paid to a claimant on the same date.
Standard allowance
Single under 25: increasing from £311.68 to £316.98
Single 25 or over: increasing from £393.45 to £400.14
Couple, both under 25: increasing from £489.23 to £497.55
Couple, one or both 25 or over: increasing from £617.60 to £628.10
Child amounts
First child (born prior to April 6, 2017): increasing from £333.33 to £339.00
First child (born on or after April 6, 2017) / second child and subsequent child (where an exception or transitional provision applies): increasing from £287.92 to £292.81
Disabled child additions
Lower rate addition: increasing from £156.11 to £158.76
Higher rate addition: increasing from £487.58 to £495.87
Incapacity payments
Limited Capability for Work (LCW) amount: increasing from £156.11 to £158.76 (only payable for claims before April 2017)
Limited Capability for Work and Work-Related Activity (LCWRA) amount: increasing from £416.19 to £423.27
Carer element
Increasing from £198.31 to £201.68
(Carer’s Allowance is a standalone benefit that can be claimed separately but the amount will be deducted in full from Universal Credit in its monthly equivalent of £354.90, rising to £360.96)
Childcare costs
Maximum for one child: increasing from £1014.63 to £1031.88
Maximum for two or more children: increasing from £1739.37 to £1768.94
Work allowances (before deductions applied for wages)
Higher work allowance (no housing amount) – one or more dependent children or limited capability for work: increasing from £673 to £684
Lower work allowance – one or more dependent children or limited capability for work: increasing from £404 to £411
Transitional disability elements
Transitional SDP (Severe Disability Premium) element (if LCWRA element included in the award): increasing from £140.97 to £143.37
Transitional SDP element (if LCWRA element not included in the award: increasing from £334.81 to £340.50
Transitional SDP element (joint claimants & higher SDP rate payable): increasing from £475.79 to £483.88
Transitional SDP element additional amount for EDP (Enhanced Disability Premium) – single: increasing from £89.63 to £91.15
Transitional SDP element additional amount for EDP – couple: increasing from £128.04 to £130.22
Transitional SDP element additional amount for DP (Disability Premium) – single: increasing from £183.52 to £186.64
Transitional SDP element additional amount for DP – couple: increasing from £262.48 to £266.94
Transitional SDP element additional amount for disabled children: increasing from £188.86 to £192.07
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