New benefits changes introduced - what do they mean for you?

New changes to the benefit system have come into effect - and many people will see their payments go up.

So let’s take a look at what’s changed.

Two-child benefit cap scrapped

The cap on the number of children you can claim benefits for has been scrapped.

Ministers believe that scrapping the cap will lift 450,000 children out of poverty by the end of this parliament.

And they’re also hopeful that the change in the law will have a big impact on working families.

In fact, the Department for Work and Pensions points out that around 60% of households affected by the two-child limit have a parent in work, and nearly half were not on universal credit when any of their children were born.

Universal credit payments have increased

Universal credit has gone up by more than inflation, which means a bit more money in your pocket each month.

The monthly standard rates have changed to:

• single under 25 - £338.58 (up from £316.98)
• single 25 and over - £424.90 (up from £400.14)
• couple under 25 - £528.34 (up from £497.55)
• couple 25 and over - £666.97 (up from £628.10) 

That’s worth around £265 extra a year for a single person, and £465 extra for a couple.

New employment support introduced

The universal credit health element rate has been lowered to £217.26 per month for new claimants.

People affected by the change will be able to access voluntary employment support, such as a meeting with a Pathways to Work adviser.

The government believes this will encourage people who can work to find employment rather than stay on benefits.

People with severe or lifelong conditions, or those nearing the end of their lives, will continue receiving the higher rate, as will existing claimants.

“The welfare system we inherited has for too long locked disabled people and people with long term conditions out of work,” said social security and disability minister Sir Stephen Timms.

“Simultaneously boosting the standard allowance and investing £3.5bn in employment support means we’re creating a welfare system that backs people to work and helps them build a better future.”

Most benefits have gone up with inflation

Every April, nine benefits must legally rise in line with inflation. 

If you receive any of these, your payments will go up:

• personal independence payment (PIP)
• disability living allowance
• attendance allowance
• incapacity benefit
• severe disablement allowance
• industrial injuries benefit
• carer’s allowance
• additional state pension
• guardian’s allowance

So if you’re claiming PIP, for example, your payments will change from:

• daily living (enhanced): £110.40 to £114.59
• daily living (standard): £73.90 to £76.71
• mobility (enhanced): £29.20 to £30.31

Child benefit and guardian’s allowance go up

If you receive child benefit, you’ll see your payments increase:

• child benefit (eldest child): £26.05 to £27.05 per week
• child benefit (other children): £17.25 to £17.90 per week

Guardian’s allowance, meanwhile, has gone up from £22.10 a week to £22.95 a week.

Extra support for pensioners

The state pension has increased by 4.8%.

From this week, the new state pension is worth £241.30 a week, up from £230.25 a week.

And the basic state pension has risen from £176.45 a week to £184.90 a week.

Pension credit has also gone up by 4.8%, so it’s worth an average of £4,300 a year, as well as opening the door to other support, including:

• help with rent
• a council tax reduction
• fuel bill support
• a free TV licence if you’re over 75

“After a lifetime of work and contribution, people deserve a decent retirement,” said pensions minister Torsten Bell.

“Raising the state pensions faster than prices, ensuring it is a pension they can rely on, is how we make that a reality for millions.”

New rights for workers introduced

The government’s flagship Employment Rights Act has come into effect, which include lots of new rights and protections for people in work, such as:

• day-one paternity and parental leave
• changes to statutory sick pay rules, so people can take time off when sick without worrying about going without pay
• greater protections against sexual harassment

Government determined to bring down cost of living, says PM

Prime minister Sir Keir Starmer has hailed the changes, saying he’s “proud” that steps are being taken to lift children out of poverty, support pensioners and enhance workers’ rights.

“I will never lose sight of how restless people are for change,” he commented.

“No matter the global uncertainty, my government will always be on the side of the British people in bearing down on the cost of living.”

Sir Keir went on to acknowledge people’s concerns about how the conflict in Iran will affect the cost of living.

However, he insisted that the UK is working closely with international partners to “push for a de-escalation in the Middle East and the re-opening of the Strait of Hormuz”. 

“This is the most effective way to ease the pressure on the cost of living,” he added.

Find out what benefits you can claim 

If you’re not sure what financial support you might be entitled to, we’re here to make it simple for you.

Try our benefits calculator or get in touch to see if you’re getting all the support you’re entitled to.