DWP update on Universal Credit payment rate increase in new statement

Labour has confirmed that Universal Credit claimants will get an above-inflation increase to their payments over the next few years.

Baroness Ruth Lister asked the Government if the plans to increase the standard allowance for Universal Credit for the duration of this Parliament would mean an above-inflation pay boost for each year.

The announced increase in the standard allowance will see an above inflation increase in every year from 2026/27 to the end of Parliament.

In response, Baroness Maeve Sherlock confirmed that the increase to the standard allowance would indeed be above inflation for the rest of this Government.

Detailing the key figures, she said: "The proposed increases are inflation (measured by CPI), plus: 2.3% in 2026/27, 3.1% in 2027/28, 4.0% in 2028/29 and 4.8% in 2029/30.

"As such, in each year, the rates will be what they would have been under CPI uprating and then increased by the relevant percentage figure."

The law states that benefits have to increase in line with inflation each April, with payments increasing 1.7% from this week.

The monthly standard allowance for Universal Credit is currently:

• Single and under 25 - £316.98
• Single and 25 or over - £400.14
• Couple both under 25 - £497.55 (for you both)
• Couple if either partner are 25 or over £628.10 (for you both).

The Government is proposing to tighten the Universal Credit system in efforts to curb the rising welfare bill. The changes will mean only those aged 22 and over can get the extra amount if you have limited capability for work, currently worth £423.27 a month.

This top-up will also reduce from £97 a week for the current tax year, down to £50 a week from 2026 to 2027, before being frozen until the end of the 2029/2030 tax year. The higher rate you can get if you have a health condition will also be frozen for the same period.

Changes to the eligibility for PIP (Personal Independence Payment) , so that to qualify for the daily living element, you will have to score at least one score of 4.

Critics fear the changes could cause financial hardship for many claimants. Rebecca Lamb, external relations manager at , said: "PIP is designed to help individuals manage the extra costs of living with a disability, and tightening eligibility will mean many will lose out on vital support.

"This isn't just a minor policy adjustment-it's a major shift that could push some of the most vulnerable into financial difficulty."