​In 2025, Universal Credit (UC) is undergoing a major transformation, impacting a significant portion of the UK population. As of January, over 7.5 million people rely on UC, making it important to understand these changes, whether you’re a recipient or supporting someone who is.

Who’s on Universal Credit Now?

Let’s begin with the basics. 7.5 million people are receiving Universal Credit as of early 2025.  

Remarkably, 42% of these claimants are classified as having “no work requirements,” which indicates that they are not now obliged to look for work.

Many people in this group have health issues or are responsible for providing care.​

Changes to Universal Credit in 2025

1. Adjustments to Payment Amounts

Starting April 2026, the standard allowance for Universal Credit will see an above-inflation increase. For a single person aged 25 or over, this means a rise from £92 per week in 2025/26 to £106 per week by 2029/30. 

However, there’s a significant caveat:

  • The health-related component for new claimants will be reduced from £97 to £50 per week in 2026/27 and then frozen at that level until 2029/30.
  • This adjustment is expected to result in an average annual loss of £500 for 2.25 million families currently receiving the health element

2. Phasing Out the Work Capability Assessment

By 2028, the Work Capability Assessment (WCA), which determines eligibility for the health component of UC, will be abolished. Instead, assessments will align with the Personal Independence Payment (PIP) criteria, focusing on daily living impacts rather than work capacity. 

3. Introducing the ‘Right to Try’ Work

A new principle is being established: the ‘right to try’ work. This means that individuals attempting employment won’t face immediate reassessment or risk losing their benefits if the job doesn’t work out. 

Additional Noteworthy Updates

  • Transition from Tax Credits: By April 5, 2025, tax credits will be fully replaced by Universal Credit. Affected individuals are receiving ‘migration notices’ and are encouraged to respond promptly to ensure continued support.
  • End of Household Support Fund: The Household Support Fund, which has provided assistance with essentials like food and energy, concluded on March 31, 2025. ​
  • Expansion of Free Childcare: Starting September 2025, parents of children aged 9 months and older will be eligible for 30 hours of free childcare per week. 

Also Read: Cost of Living Payments 2025

Implications and Considerations

These changes aim to streamline the benefits system and encourage employment. However, they also raise concerns:

  • Financial Impact: The reduction in the health component could significantly affect those with disabilities or long-term health conditions.
  • Assessment Changes: While the shift from WCA to PIP criteria may simplify processes for some, it could also lead to challenges for others in demonstrating their eligibility.​
  • Employment Encouragement: The ‘right to try’ initiative seeks to reduce the fear of losing benefits when attempting work, potentially increasing employment rates among claimants.

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