What is Universal Credit?

Universal Credit is the UK's main benefit for working-age people who are out of work or on a low income. It is a single monthly payment, administered by the Department for Work and Pensions (DWP), that replaces six older benefits: Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance, Housing Benefit, Working Tax Credit and Child Tax Credit. Instead of separate claims for rent, children and living costs, you make one claim and receive one monthly amount that is recalculated each month as your circumstances change.

The payment is means-tested, so what you receive depends on your household income, savings and circumstances, not on how much National Insurance you have paid. It is designed so that taking work, or working more hours, always leaves you better off, because the payment falls gradually as earnings rise rather than stopping all at once.

Who can claim Universal Credit?

GOV.UK sets out four basic conditions: you must live in the UK, be aged 18 or over, be under State Pension age, and have £16,000 or less in money, savings and investments. If you live with a partner, you usually claim jointly and your partner's income and savings count too. There are exceptions for some 16 and 17-year-olds, for example if you have a child or a health condition, and for some people in full-time education or training.

Savings between £6,000 and £16,000 reduce the award: the DWP treats each £250, or part of £250, above £6,000 as £4.35 a month of income and deducts it. Savings of £6,000 or less are ignored. If your savings are above £16,000 you are generally not eligible, although some compensation payments and certain other funds are disregarded.

How much is Universal Credit in 2026/27?

Every award starts with a standard allowance, and the monthly rates for 2026/27 are £338.58 for a single person under 25, £424.90 for a single person aged 25 or over, £528.34 for a couple where both are under 25, and £666.97 for a couple where one or both are 25 or over. The standard allowance is only the starting point. Extra amounts, called elements, are added for children, housing costs, disability, health conditions and caring, and deductions are then taken off for earnings, savings, other benefits and any advance repayments.

For children, GOV.UK lists £303.94 a month for each child who lives with you, plus £47.94 for a first child born before 6 April 2017, making £351.88 for that child. The two-child limit ended for assessment periods beginning on or after 6 April 2026, so the child element is now paid for every eligible child. A disabled child attracts a further £164.79 a month at the lower rate or £514.71 at the higher rate. The carer element is £209.34 a month for someone who cares for a severely disabled person for at least 35 hours a week.

The health element for limited capability for work and work-related activity is £429.80 a month for most existing claimants, with a lower rate of £217.26 a month for most new claims, depending on when and how the condition was assessed. The housing element helps with rent and some service charges, up to a local limit called the Local Housing Allowance, and Universal Credit can cover up to 85% of eligible childcare costs, subject to a monthly cap.

How does Universal Credit change when you work?

If you have a child, or a health condition that affects your ability to work, you get a work allowance: an amount of earnings that is ignored before any reduction begins. For 2026/27 the work allowance is £427 a month if your award includes help with housing costs, or £710 a month if it does not. If you have no children and no limited capability for work, you have no work allowance and the reduction starts from the first pound you earn.

Above the work allowance, your payment falls by 55p for every £1 of take-home pay. You keep 45p of each extra pound, plus the earnings themselves, so working more always leaves you better off. The DWP normally uses the net pay reported through your employer's payroll, so the calculation follows your actual monthly earnings.

As an example, a single person aged 25 or over with no children, no housing element and no work allowance, whose standard allowance is £424.90, would see a £550 reduction from £1,000 of monthly earnings, taking the payment to zero. The same person earning £500 a month would lose £275 and keep £149.90 of Universal Credit on top of their wages. These are illustrations using the standard allowance only; additional elements would raise the starting figure.

How and when are you paid?

Universal Credit is paid once a month, usually into your bank, building society or credit union account. The first payment normally arrives about five weeks after you claim, because each payment covers a one-month assessment period and is then paid seven days after that period ends. If you cannot wait, you can ask for an advance payment, but it is a loan: it is paid back through deductions from future Universal Credit payments.

You claim online at GOV.UK, then verify your identity and attend an appointment at a Jobcentre, where a work coach agrees what you will do to look for work or prepare for work. This agreement is called a claimant commitment. You must report changes of circumstances, such as a new job, a change in hours, moving home or a child leaving home, because the monthly amount is recalculated from what the DWP knows about you.

What changed in 2026?

Two significant changes took effect in 2026. The Universal Credit (Removal of Two Child Limit) Act 2026 received Royal Assent on 18 March 2026 and took effect on 6 April 2026, ending the rule that limited the child element to two children. And the Universal Credit Act 2025, which received Royal Assent on 3 September 2025, requires the standard allowance to rise each year by at least September inflation plus an extra uplift: 2.3% in 2026/27, 3.1% in 2027/28, 4.0% in 2028/29 and 4.8% in 2029/30. The April 2026 rise was therefore above inflation for the first time in years, while the health elements are frozen from 2026/27 to 2029/30.

The DWP is also still moving the last people on older legacy benefits onto Universal Credit, sending migration notices to remaining claimants. If you receive a migration notice, there is a deadline to claim, and transitional protection can apply. Rules differ in Northern Ireland, where Universal Credit is administered separately, so claimants there should check the nidirect guidance.

Frequently asked questions

Can I claim Universal Credit if I am working? Yes. It is for people on a low income as well as people out of work. Your earnings reduce the payment by 55p per £1 above any work allowance, but you always keep 45p of each extra pound, so working more leaves you better off.

How long does a Universal Credit claim take? The first payment normally arrives about five weeks after you claim. An advance is available if you need money sooner, but it is repaid from future payments.

Does Universal Credit cover rent? It can. The housing element helps with rent and some service charges, up to the Local Housing Allowance limit for your area. It does not cover mortgage payments, although separate Support for Mortgage Interest help may be available as a loan.

Is there a limit on how much Universal Credit I can get? Yes, the benefit cap limits the total amount some households can receive from certain benefits, and the cap level varies, including a higher level in London. How it applies depends on your household and whether any exemptions apply, such as receiving certain disability benefits or earning above a threshold.

Where can I check what I would get? GOV.UK lists independent benefits calculators that give a full estimate based on your circumstances. A calculator result is an estimate, not a guaranteed payment, and the DWP makes the final decision.

Figures in this guide are the 2026/27 rates published by GOV.UK and checked in November 2026. Rules change, so always check the current GOV.UK pages before claiming. This is general information, not benefits advice.