Stella
The Department for Work and Pensions (DWP) has announced a significant and permanent increase in Universal Credit, marking a major shift in welfare support for millions across the United Kingdom.
For the first time, the Universal Credit standard allowance will increase beyond the rate of inflation, offering long-term relief to those in need.
Largest Real-Term Boost Since 1980
According to the Institute for Fiscal Studies, this update will be the largest permanent uplift in real terms to the core out-of-work benefit rate since 1980.
Nearly four million households stand to benefit from the change. In financial terms, a single adult aged 25 or older will see an extra £725 per year by 2029/30.
Support for the Severely Disabled
Work and Pensions Secretary Liz Kendall emphasized the government’s focus on vulnerable individuals. She confirmed that the reforms will allow disabled individuals to explore employment opportunities without the fear of losing support if their situation changes.
A special emphasis is being placed on protecting those with the most serious conditions. Around 200,000 people who qualify under the Severe Conditions Criteria—those with severe, lifelong illnesses—will be exempt from reassessments for Universal Credit.
Yearly Increase in Health Element for Vulnerable Groups
Starting in 2026/27 through 2029/30, individuals who are either:
- Existing recipients of the Universal Credit health element, or
- Diagnosed with 12 months or less to live, or
- Meeting the Severe Conditions Criteria
will benefit from a combined increase to their standard allowance and health element, which will at least match inflation each year. This commitment aims to ensure these individuals continue living with dignity and financial security.
Bank Holiday Payment Update – August 2025
The DWP also released updates regarding payment schedules for the August 2025 bank holiday. Payments originally scheduled for:
- Saturday, 23 August 2025
- Sunday, 24 August 2025
- Monday, 25 August 2025
will now be paid earlier on Friday, 22 August 2025.
This applies to all regions of the UK, including Scotland, regardless of varying bank holiday observances.
Benefits Affected by Early Payment
The early payment update impacts multiple DWP benefits, including:
| Benefit Name | Early Payment Date |
|---|---|
| Universal Credit | Friday, 22 August 2025 |
| Child Benefit | Friday, 22 August 2025 |
| State Pension | Friday, 22 August 2025 |
| Personal Independence Payment (PIP) | Friday, 22 August 2025 |
| Attendance Allowance | Friday, 22 August 2025 |
| Disability Living Allowance | Friday, 22 August 2025 |
| Carer’s Allowance | Friday, 22 August 2025 |
| Employment and Support Allowance | Friday, 22 August 2025 |
| Income Support | Friday, 22 August 2025 |
| Jobseeker’s Allowance | Friday, 22 August 2025 |
| Pension Credit | Friday, 22 August 2025 |
| Tax Credits | Friday, 22 August 2025 |
Important Note: While payments will arrive earlier than usual, your next payment will follow the normal schedule, so it’s important to plan accordingly.
The DWP’s recent announcement introduces a landmark increase in Universal Credit, ensuring it rises above inflation and provides enhanced support for millions of UK residents.
With additional attention to vulnerable groups, especially the severely disabled, these reforms reflect a push toward a more secure and equitable welfare system.
Additionally, early payments ahead of the August 2025 bank holiday provide clarity and predictability for benefit recipients, allowing them to manage their finances more effectively.
FAQs
How much more will Universal Credit recipients receive by 2029/30?
Eligible single adults aged 25 or older will receive an extra £725 annually by 2029/30 due to the permanent uplift.
Who qualifies for exemption from Universal Credit reassessment?
Individuals under the Severe Conditions Criteria, those with lifelong, debilitating conditions, are exempt from reassessments.
When will DWP benefits be paid over the August 2025 bank holiday?
Payments originally due on August 23–25, 2025, will be issued early on Friday, August 22, 2025, across the UK.