The UK government has recently announced significant changes to Universal Credit and various other benefits scheduled for 2025. This move is set to impact a large number of claimants and will result in changes to several key benefits. Benefits such as Child Benefits, Universal Credit, and Personal Independence Payments (PIP) are due to increase by 1.7% in the upcoming year, aligning with inflation figures from September. Additionally, all disability benefits and the Carer’s Allowance will see a similar increase of 1.7%.
Universal Credit, a vital support system for individuals with low incomes to cover living expenses, is set to replace several benefits including Child Tax Credit, Housing Benefit, and Income Support. By the end of 2025, this transition is expected to be fully implemented. Furthermore, the National Minimum Wage is also due to rise by 6% in April, benefiting an estimated 1.2 million Universal Credit claimants by £420 annually, as per the Department for Work and Pensions.
Moreover, changes to the Carer’s Allowance will see an additional 60,000 carers gaining access to the allowance with a £45 increase per week. This alteration in April will also raise the earnings threshold for the Carer’s Allowance from £151 to £196 weekly, allowing carers to work additional hours while still being eligible for the benefit. Currently claimed by approximately 1.4 million people in the UK, Carer’s Allowance requires a minimum of 35 hours of weekly care provision.
Legacy benefits are expected to fully transition to Universal Credit by December 2025, with all recipients under the old system being migrated. Managed migration notices are slated to be dispatched by the end of the year, completing the transfer of individuals on income-related Employment and Support Allowance to Universal Credit across the UK. This gradual process, known as managed migration, is already underway in some parts of Wales and the UK and is anticipated to be finalised by the year-end.
From April, individuals on Universal Credit are likely to receive the same amount as their previous benefits or more, with transitional protection available if the entitlement is lower on Universal Credit. This transitional phase aims to ensure individuals do not experience a reduction in their overall benefits post-transition. These changes signify a significant shift in the benefits landscape and are expected to impact millions of individuals across the country. Stay tuned for more updates on the evolving benefit system as we approach 2025.