Universal Credit Increase 2024: What You Need to Know

Juilia Ruskin
4 Min Read

Starting in April 2024, Universal Credit payments in the UK will increase by 6.7%. This change, announced by the Department for Work and Pensions (DWP), is tied to the inflation rate measured in September 2023. In this article, we will explain what this increase means and how it will impact those receiving Universal Credit.

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Understanding Universal Credit Increase Significance

Who Receives Universal Credit?

Universal Credit is a benefit for people in the UK who are on low income or out of work. As of October 2023, there are more than 6.2 million Universal Credit claimants in the UK, including 172,000 in Birmingham. The amount you receive can vary based on your situation, such as whether you are single, in a couple, or have children.

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Overview of the Universal Credit Increase 2024

Increase Rate and Effective Date

The increase in Universal Credit payments will start in April 2024. This increase is based on the 6.7% inflation rate from September 2023. This adjustment helps ensure that the benefits keep up with the cost of living.

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New Payment Rates

For example, single claimants under 25 will see their monthly payment rise from £292.11 to £311.68, an increase of £19.57. Single claimants over 25 will see their payments increase from £368.74 to £393.45, a rise of £24.71. If you live with a partner and both of you are under 25, your payment will increase by £30.72 to £489.23. Couples over 25 will see their payments go from £578.82 to £617.60, an increase of £38.78.

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Expected Increase in Payments

Annual Increase Announcement

The Chancellor announced this annual increase in his Autumn Statement. The Treasury estimates that in 2024–2025, 5.5 million Universal Credit households will get an average gain of £470 per year. However, some research indicates that even with this increase, many households may still struggle financially.

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Impact on Households

According to the New Economics Foundation, some people on Universal Credit may still be up to £670 worse off in April 2024 due to rising costs that outpace the benefit increases.

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How Your Payments Are Calculated

Regular Allowance and Additional Amounts

Universal Credit payments consist of a standard allowance, which varies based on your circumstances, and additional amounts if you qualify for them. The increase will affect all components of Universal Credit, ensuring that the payments reflect the higher cost of living.

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Important Considerations

Economic Challenges

Despite the increase, some experts believe that the rise in benefits will not be enough to keep up with the growing expenses of living. They argue that while inflation is at 6.7%, the financial burden on households remains high.

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The 6.7% increase in Universal Credit payments starting in April 2024 is designed to help claimants cope with rising living costs. However, the real impact of this increase will depend on individual circumstances and the broader economic environment.

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When will the Universal Credit increase take effect?

The increase will start in April 2024.

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How much will payments increase by?

Payments will increase by 6.7% based on the September 2023 inflation rate.

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Who benefits from the increase?

All Universal Credit claimants will see an increase, with the exact amount depending on their specific circumstances.

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Why is the increase based on the September inflation rate?

The increase is traditionally based on the inflation rate from the previous September to account for the cost of living.

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Will the increase be enough to cover rising living costs?

Some experts believe the increase may not fully cover the rising expenses faced by many households.

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