What is Universal Credit?
Universal Credit is the UK's main working-age benefit — a single monthly payment replacing six older benefits, supporting people on low incomes whether in or out of work, tapered away at 55p per £1 earned.
How Universal Credit works
UC merged six benefits (including housing benefit and tax credits) into one monthly payment. You get a standard allowance (2025/26: about £400 a month for a single person 25+, £628 for a couple), plus elements for children (about £292.81 a month each — see the two-child limit, now being scrapped), housing, childcare (85% of costs) and ill-health. As you earn, UC is withdrawn at 55p per £1 of net earnings above any work allowance (£411–£684 a month for those with children or limited capability for work). Around 7 million households receive it — about 40% of them in work.
What's changing
The Universal Credit Act 2025 rebalanced the benefit: the standard allowance rises above inflation each year to 2029/30, while the health-related element is roughly halved for new claims from April 2026 (existing claimants keep the higher rate) — the government's attempt to reduce the incentive to be classed as too ill to work, which critics call a cut to future disabled claimants. Scrapping the two-child limit adds up to £3,514 a year per previously excluded child.
Why it matters now
UC is where every cost-of-living argument lands: the two-child limit abolition (and Reform's pledge to reinstate it), the disability-benefits row, and the interaction with the minimum wage — a taper of 55% plus tax and NI means some workers keep barely 30p of an extra £1 earned. Whether UC is too generous or too mean is really an argument about which of its seven million households you picture.
Plain-English guide for general information only — not financial, legal or tax advice. Rates are 2025/26 unless stated. Last reviewed 5 July 2026.
Frequently asked questions
How much is Universal Credit in 2025/26?
The standard allowance is about £400.14 a month for a single person 25 or over and £628.10 for a couple, plus elements for children (£292.81/month), housing, childcare and health conditions. Your exact award depends on earnings, rent and circumstances.
How much can I earn before Universal Credit stops?
There's no single cut-off: UC falls by 55p for each £1 of net earnings above your work allowance (£411/month if UC covers your rent, £684 if not, for those eligible). It reaches zero at higher earnings the more elements you receive.
What is changing about Universal Credit?
The standard allowance rises above inflation each year to 2029/30; the health element is roughly halved for new claims from April 2026; and the two-child limit on the child element is being scrapped — with Reform UK pledging to reinstate it.