Universal Credit £420 Boost

 

Universal Credit claimants receive £420 boost in Budget
More than a million households in receipt of Universal Credit will benefit from changes to the system announced by Chancellor Rachel Reeves in the Budget.


Ms Reeves announced that Labour will be lowering the cap on deductions that can be taken from benefit payments by up to £420 a year.

It is estimated that the change will benefit around 1.2 million households across the country, including 700,000 families with children.

Making the announcement during the Budget, the Chancellor said: "I can today announce that we are introducing a new Fair Repayment Rate to reduce the level of debt repayments that can be taken from a household’s Universal Credit payment each month from 25 per cent to 15 per cent of their standard allowance.

"This means that 1.2 million of the poorest households will keep more of their award each month lifting children out of poverty and those who benefit will gain an average of £420 a year."


The new Fair Repayment Rate will come into force in April 2025, with the deductions cap set at 15 per cent as opposed to 25 per cent.

This is money the government can take off a Universal Credit claimant's allowance to help them make debt repayments.

These deductions can cover a range of debts, including benefit advances, historical overpayments of child tax credits, rent and council tax arrears.

They are deducted from claimant's Universal Credit standard allowance each month until the debt is paid off, but many have complained it puts vulnerable people into severe hardship.

While this may take longer to repay debts, it could be a lifeline to some of the poorest households, already struggling with spiralling costs.