Starting April 2024, Universal Credit payments in the UK will see an increase. This change, announced by the Department for Work and Pensions (DWP), follows a rise in inflation.
The adjustment reflects a 6.7% increase based on the September 2023 Consumer Prices Index (CPI). This article explains the details, significance, and what the increase means for claimants.
Significance of the Increase
As of October 2023, more than 6.2 million people in the UK receive Universal Credit, including 172,000 in Birmingham. The amount of the increase depends on individual circumstances, such as whether a claim is for a single person or a couple, or if there are children. Currently, monthly payments range from £630 to £1,140.
Every April, benefits are adjusted based on the previous September’s inflation rate. With the 6.7% inflation rate in September 2023, benefits will increase by about £25 per month starting in April 2024.
Details of the 2024 Increase
The increase was announced by the Chancellor in the Autumn Statement and will be based on the September CPI rate rather than October’s. The Treasury estimates that 5.5 million Universal Credit households will see an average annual increase of £470.
However, research from the New Economics Foundation indicates that, despite this rise, people might still be financially worse off due to increasing living costs.
Breakdown of the Increase
- Under 25: The current monthly allowance of £292.11 will rise to £311.68, an increase of £19.57.
- Over 25: The current allowance of £368.74 will go up to £393.45, an increase of £24.71.
- Couples (Both under 25): The current monthly allowance of £458.51 will increase to £489.23, an additional £30.72.
- Couples (Both over 25): The current allowance of £578.82 will rise to £617.60, an increase of £38.78.
In addition to these standard amounts, claimants may receive extra amounts based on their personal circumstances.
The 2024 Universal Credit increase aims to assist around 5.5 million families, with an estimated average annual gain of £470. However, some experts believe that this increase may not fully cover the rising living costs, making it possible that many claimants will still face financial challenges.
What is Universal Credit?
Universal Credit is a financial support program for people who are unemployed, working with low income, or unable to work due to health reasons.
When will the Universal Credit increase take effect?
The increase will start in April 2024.
How much will Universal Credit payments increase by?
Payments will increase by 6.7%, which translates to about £25 more per month for many people.
Who will benefit from the increase?
Around 5.5 million households receiving Universal Credit will benefit from the increase.
Will the increase be enough to cover rising living costs?
Some experts believe that despite the increase, the rising cost of living may still leave some individuals financially strained.