In a significant change to the welfare system, people claiming benefits from the Department for Work and Pensions (DWP) may face delays of up to two months before seeing the benefits of an uplift announced for April 2025. As part of the government's efforts to support households grappling with rising living costs, benefits such as Personal Independence Payment (PIP) and Universal Credit were increased by 1.7% starting April 7. However, due to the DWP's payment rules, many claimants will not see this increase reflected in their payments until their next scheduled payday in May.
According to The Mirror, this means that many will receive a blend of the old and new rates until a full payment cycle has passed. Financial support charity Turn2us has indicated that for some Universal Credit claimants, the new rates may not take effect until around June 2025, as the increase will only be applied during the first assessment period beginning on or after April 7.
Other benefits affected by the 1.7% increase include Carer's Allowance, Income Support, Housing Benefit, and Jobseeker's Allowance. Meanwhile, the State Pension will see a more substantial increase of 4.1%. The DWP has been proactive in notifying all benefit claimants about their new payment amounts through official letters.
Despite these increases, charities have warned that the rises will translate to only a few extra pounds each month for most claimants, urging the government to consider larger increases to help households manage their rising expenses. This comes on the heels of the Chancellor's announcement regarding a forthcoming overhaul of the welfare system during the March 2025 spring statement, highlighting a need for reform in what he described as a "broken social security system."
The planned changes include tightening eligibility criteria for PIP and the sickness element of Universal Credit, which may impact around 800,000 PIP claimants who could see their payments reduced.
As part of the new payment structure for 2025/26, the DWP has detailed the following new rates:
- Attendance Allowance Higher Rate: £110.40 (up from £108.55)
- Attendance Allowance Lower Rate: £73.90 (up from £72.65)
- Carer's Allowance: £83.30 (up from £81.90)
- Child Benefit: £26.05 for the eldest or only child (up from £25.60)
- Disability Living Allowance Care Component Highest: £110.40 (up from £108.55)
- Universal Credit joint claimants aged under 25: £497.55 (up from £489.23)
- Universal Credit claimants aged 25 or over: £628.10 (up from £617.60)
In another development, former DWP employee Sandra Wrench has raised concerns about the widening gap between the New and Basic State Pensions. Currently, there are 13 million people of State Pension age in Great Britain, with 34% receiving the New State Pension and 66% on the Basic State Pension.
The Triple Lock guarantee, which ensures that pensions increase in line with the highest of average earnings growth, Consumer Price Index (CPI) inflation, or 2.5%, is only applicable to the Basic and New State Pensions. However, additional elements of the State Pension, including deferred amounts, rise only by the September CPI rate. Wrench has warned that this creates a two-tier uprating system, disadvantaging those who reached State Pension age before April 2016.
Wrench explained that while the Triple Lock guarantees a 4.1% increase for the New and Basic State Pension, additional components see only a 1.7% increase. This discrepancy could lead to greater financial strain for older pensioners who rely on these additional components.
As the DWP continues to issue letters informing pensioners of their new rates, the Labour government has committed to maintaining the Triple Lock throughout its term. Future projections suggest that while the 2025/26 increase is confirmed at 4.1%, subsequent years may see lower increases of 2.5%.
Moreover, starting in April 2025, the UK government will implement significant reforms to its Housing Benefit scheme. Currently, over three million people in the UK rely on Housing Benefit, which provides essential rent support to low-income individuals and families. The reforms aim to better align support with current economic realities and regional housing conditions.
The changes will introduce stricter income and asset tests, with new eligibility limits tightening the financial thresholds for applicants. For instance, the annual household earnings limit will drop from £16,000 to £14,000, while the individual savings limit will decrease from £6,000 to £4,500. Couples will see their savings threshold reduced from £10,000 to £8,000.
In addition, there will be stricter employment-related expectations for working-age claimants, requiring them to demonstrate active job-seeking efforts. This policy aims to encourage greater workforce participation while still supporting those in need. However, exemptions will be provided for vulnerable populations, including the elderly and disabled.
Another major shift involves recalibrating how Housing Benefit amounts are calculated based on local rent rates rather than a national average. This change will ensure that payments more accurately reflect regional housing costs, with areas experiencing rising rents likely to see increased benefits, while lower-rent regions may experience reductions.
As the government rolls out these reforms, claimants will be notified by their local council at least 30 days before any changes take effect, allowing them time to prepare. The phased implementation will begin with new applications in April 2025, followed by the transition of existing beneficiaries through 2025 and into early 2026.
Lastly, amidst these welfare changes, the DWP is also facing scrutiny over proposed cuts to Personal Independence Payments (PIP) and Universal Credit. In June 2025, MPs are expected to vote on plans to cut £4.8 billion from disability payments, a move that has already sparked significant backlash from within the Labour party itself. The government argues that reforms are necessary to address a system that has become unsustainable, with Chancellor Rachel Reeves asserting that immediate action is required to avoid writing off an entire generation.
As the landscape of welfare support continues to evolve, many claimants are left to navigate an increasingly complex system while grappling with the realities of rising living costs and changing eligibility criteria.
