Marvin OnumonuMore than one million households on Universal Credit are set to keep an average of £420 more of their benefits each year, following a rule change that came into effect today, 30th April 2025.
The Department for Work and Pensions (DWP) has said that 1.2 million low-income households, including 700,000 with children, will see the benefit after the standard repayment cap on Universal Credit deductions dropped from 25% to 15%.
This fair repayment rate will mean households struggling with debt will keep more of their benefit payments.
The adjustment is part of a wider plan to help people into work and increase support for families on low incomes.
Chancellor Rachel Reeves said: “As announced at the budget, from today, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year.
“This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people.”
With 2.8 million households having deductions made to their Universal Credit each month to pay off debts, the Government said the lower cap is intended to make repayments more manageable.
Work and Pensions Secretary Liz Kendall said: “As part of our Plan for Change, we are taking decisive action to ensure working people keep more of the benefits they’re entitled to – which will boost financial security and improve living standards up and down the country.
“We’re delivering meaningful change to ensure everyone has a fair chance, the support they need, and real hope for the future.”
