John Hughie
Millions of UK households may see a significant financial boost next year as the Department for Work and Pensions (DWP) rolls out a major Universal Credit shake-up.
Under a new welfare reform bill, the standard Universal Credit allowance is set to increase, while changes to the health top-up component have raised concerns among advocacy groups.
The reforms aim to rebalance support, tackle long-standing system flaws, and encourage work participation. However, critics argue it could create a two-tier system that disadvantages new claimants.
What Is Changing in Universal Credit?
The proposed Universal Credit Bill includes a number of key measures that will affect different groups of claimants. Here’s what’s planned:
| Key Reform | Details |
|---|---|
| £725 Annual Increase | Standard Universal Credit allowance to increase above inflation by 2029/30 |
| Health Top-Up Reduction | For new claims starting April 2026, weekly top-up drops to £50 |
| Protection for Current Recipients | Current health top-up recipients and those under severe conditions remain protected |
| Reassessment Exemptions | 200,000 claimants with lifelong severe conditions to be exempt from reassessments |
| Right to Try Work Policy | Disabled claimants can attempt work without fear of losing support |
| Ongoing Annual Adjustments | UC components will rise with inflation through 2029/30 |
The £725 Universal Credit Boost
The most headline-grabbing element is the £725 real-terms increase to the standard allowance. This is intended to help claimants keep pace with rising living costs, ensuring that income support doesn’t erode over time.
For a single adult aged 25 or older, this increase represents a permanent shift to make out-of-work benefits more reflective of basic living needs. This is the largest real-terms boost to the standard rate in decades.
The annual increase will be phased in gradually until it totals £725 by 2029/30, offering an estimated £13.90 more per week to eligible claimants.
Health Top-Up Changes and Impact
Starting April 2026, newly approved health-related Universal Credit claims will receive a reduced health top-up of £50 per week, down from approximately £97 per week currently.
This change does not affect:
- Existing recipients of the health element
- Claimants with Severe Conditions Criteria (SCC)
- Individuals eligible under end-of-life provisions
Those covered by these exemptions will continue to receive the higher support amount, and this will also be adjusted annually in line with inflation.
Enhanced Support for the Severely Disabled
One of the major improvements within the reforms is the plan to exempt around 200,000 people with lifelong, severe conditions from future reassessments. This measure intends to reduce administrative burden and stress for those whose conditions are unlikely to improve.
These claimants will:
- Retain the higher health component
- Receive annual increases
- Be shielded from disruptive reassessment processes
This is expected to offer greater security and peace of mind to some of the most vulnerable people in the system.
Right to Try Work Without Penalty
Under the new reforms, disabled or long-term sick individuals will have a Right to Try Work. This gives claimants the ability to attempt employment without triggering an immediate loss or reassessment of their Universal Credit entitlements.
The policy is designed to remove the fear that trying to return to work could result in the loss of long-term support. If a job attempt fails, claimants will still retain access to their existing level of support without punitive consequences.
Investment in Employment Support
To support these welfare changes, a £3.8 billion employment support package has been announced. This funding will be used to expand and improve access to:
- Tailored employment and health services
- Training and skills development programmes
- One-on-one guidance through initiatives like the Connect to Work programme
This approach aligns with the broader goal of increasing workforce participation among disabled and long-term sick individuals.
Public Reaction and Concerns
Despite the positive elements of the Universal Credit shake-up, charities and disability rights groups have voiced serious concerns:
- The halving of the health top-up for new claimants could result in a loss of over £200 a month.
- Claimants with fluctuating conditions may struggle to meet new eligibility requirements.
- A two-tier system could form—where claimants who apply after April 2026 are placed at a significant disadvantage compared to existing recipients.
There are growing calls for the government to fully assess the impact on disabled youth, people with variable health conditions, and those who may be unaware of the reassessment protections available.
The upcoming Universal Credit reforms represent one of the most significant shifts in the UK welfare system in recent years.
With a £725 increase in the standard allowance and permanent inflation adjustments, many households could see meaningful improvements in their financial stability.
However, the cut to the health top-up for new claimants poses risks to vulnerable individuals. While protections exist for current recipients and those with severe conditions, advocacy groups remain concerned about future inequality within the system.
For now, it is essential for current and future claimants to understand their entitlements, prepare for the changes, and make use of the expanded employment and support services.
These reforms promise greater opportunity—but also demand greater clarity, fairness, and care for those most at risk.
FAQs
Who qualifies for the £725 Universal Credit increase?
All standard Universal Credit recipients will gradually receive this increase by 2029/30. This applies to individuals aged 25+ who meet the eligibility criteria.
Will my health top-up be reduced if I’m already receiving it?
No. Current recipients of the health top-up and those meeting SCC or end-of-life conditions will not see a reduction.
Can I return to work without losing my Universal Credit?
Yes. Under the Right to Try initiative, you can attempt to work without fear of reassessment or losing support if the job doesn’t work out.
