Universal Credit Change Brings £420 Boost to Over a Million Households
A significant change to Universal Credit comes into force today, with over a million households struggling with debt set to keep an average of £420 more of their benefits each year. The Fair Repayment Rate, announced by the Chancellor at the Autumn Budget, reduces the maximum amount that can be taken from someone’s Universal Credit standard allowance payment to repay debt from 25% to 15%.
According to the UK Government’s official website, this change will benefit around 1.2 million of the poorest households, including 700,000 households with children. The new rate is designed to ensure that money is repaid where it is owed, and people can still cover their day-to-day needs. As the UK Government reports, with as many as 2.8 million households seeing deductions made to their Universal Credit award to pay off debt each month, the new rate will help to ease the cost of living and put more money into the pockets of working people.
Chancellor of the Exchequer Rachel Reeves said, as quoted on the UK Government’s website: "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."
The Fair Repayment Rate is part of the Government’s Plan for Change, which aims to put more money into people’s pockets and boost living standards. The plan includes a range of measures, such as overhauling Jobcentres, introducing a new jobs and careers service, and launching a youth guarantee to help young people into work. The UK Government also reports that the Household Support Fund has been extended for another year, with £742 million in funding to support low-income households with energy bills, food, and essential items.
Work and Pensions Secretary Liz Kendall said, as quoted on the UK Government’s website: "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."
The change to the Fair Repayment Rate will be applied to all assessment periods that start on or after 30 April. The 15% deductions cap continues to support customers to repay their debts at a sustainable rate. As the UK Government notes, this change is just one of a number of bold measures being taken as part of its Plan for Change to kickstart growth and spread prosperity across the country.
In related news, the Government is also working to tackle child poverty, rolling out free breakfast clubs in all primary schools in England as the dedicated ministerial taskforce builds its ambitious strategy to ensure every child has the best start in life. The UK Government’s Plan for Change is a comprehensive effort to address poverty and improve living standards, and the change to the Fair Repayment Rate is a key part of this initiative.
The change to Universal Credit is a welcome boost for low-income households, who have been struggling with the cost of living. As reported by the UK Government, the new Fair Repayment Rate will help to ensure that people can still cover their day-to-day needs while repaying their debts in a sustainable way. With this change, the Government is taking a significant step towards putting more money into people’s pockets and boosting living standards.
Additional information on the Universal Credit change can be found on the UK Government’s website.
