The Department for Work and Pensions is preparing to give individuals born before 2000 a free £126. At present, a single person under 25 claiming Universal Credit receives £311.63 monthly, while a single person aged 25 or over on the benefit gets £393.45 monthly.
From April 7, these rates will increase to £316.98 and £400.14 per month, respectively. Joint claimants both under 25 will see their monthly allowance rise from £489.23 to £497.55.
For couples where one or both are aged 25 or over, monthly payments will increase from £617.60 to £628.10. This equates to an extra £10.50 a month, or £126 annually.
The Secretary of State for Work and Pensions is obligated to review the level of benefits and State Pensions each year. This briefing outlines the main benefit, pension and tax credit rates announced for the 2025/26 financial year.
Inflation-linked benefits and tax credits will increase by 1.7% from April 2025, in line with the Consumer Prices Index (CPI) rate of inflation in September 2024. The basic and new State Pensions will be uprated by 4.1% from April 2025, in line with the annual increase in the Average Weekly Earnings (AWE) index for May–July 2024, reports Birmingham Live.
The Labour Party elucidated: “Although their effect in any given year is usually not dramatic, uprating decisions and rules compound over time and have substantially changed the value of benefits, both in real terms and relative to earnings. A useful illustration of this is the change in the real value of the basic State Pension compared with basic levels of unemployment support.”
They further clarified: “Rates for these two benefits tracked against one another from their introduction until the 1970s. After that, the rates diverged as pensions were increased by a greater amount with the introduction of earnings links in the 1970s, and the more recent triple lock. Whereas unemployment benefit rates have shown a decades-long downward trend.”