The Department for Work and Pensions will increase Universal Credit rates above inflation next spring, offering some relief to millions of claimants. Benefits experts welcomed the move as a "step in the right direction" but warned it remains insufficient to address the ongoing cost-of-living crisis.
Anna Stevenson, benefits expert at Turn2us, explained the increase comes after decades of erosion in support levels. "Raising the Universal Credit standard allowance above inflation is a step in the right direction, but it comes after decades of erosion. Support remains at one of its lowest ever levels in real terms and as a proportion of average earnings. Many households will still struggle to meet basic costs because rents, childcare and energy have risen far faster," she said.
The scale of financial hardship facing claimants remains stark. Around 40% of people using Turn2us's Benefits Calculator report being unable to afford food, while over 600,000 households on transitional protection will see no increase at all because their payments remain frozen in cash terms. The rate increase, expected in April 2026, will be based on September's 3.8% inflation figure.
Call for Stronger Protection
Stevenson supports proposals from the Joseph Rowntree Foundation and Trussell Trust for an "Essentials Guarantee" to address the underlying problem. "That's why we're supporting the Joseph Rowntree Foundation and Trussell Trust's proposal for an Essentials Guarantee, which would set a legal minimum so Universal Credit always covers life's basics like food, heating and rent. Without that, people will continue to fall further behind even when benefits rise on paper," she said.
Consumer finance expert Tamsin Powell warned that even above-inflation increases may not restore financial stability for struggling households. "Any rise will offer some relief, but a modest increase next spring won't be enough to rebuild financial resilience or help households recover from the ongoing cost-of-living squeeze," she said, calling for a more responsive benefits system.
Note: This article was created with Artificial Intelligence (AI).
