How it works
Universal Credit standard allowance 2026/27
Universal Credit (UC) replaces six legacy benefits: Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance, Housing Benefit, Child Tax Credit, and Working Tax Credit. Most new claimants must claim UC rather than legacy benefits.
Your UC payment starts with a standard allowance, then adds elements on top for housing, children, caring, or health conditions. From that total, any earnings are deducted at the 55% taper rate, and other income (savings over £6,000, other benefits) may also reduce your award.
| Who | Monthly standard allowance |
|---|---|
| Single, under 25 | £311.68 |
| Single, 25 or over | £393.45 |
| Joint claim, both under 25 | £489.23 |
| Joint claim, one or both 25+ | £617.60 |
UC elements — what can be added
In addition to the standard allowance, Universal Credit can include the following elements:
| Element | Monthly amount (2026/27) | Who qualifies |
|---|---|---|
| Housing | Up to Local Housing Allowance rate | Renters; or actual mortgage interest for homeowners (via Support for Mortgage Interest loan) |
| Child element — first child | £338.00 | First or only child born before 6 Apr 2017 (transitional protection may apply for newer children) |
| Child element — further children | £287.92 | Each additional child (two-child limit for children born on/after 6 Apr 2017) |
| Disabled child — lower rate | £156.11 | Child getting DLA lower/middle rate care or PIP daily living |
| Disabled child — higher rate | £487.58 | Child getting highest DLA care or enhanced PIP daily living |
| Limited Capability for Work (LCW) | £156.11 | Awarded after Work Capability Assessment (new claimants) |
| Limited Capability for Work & Work-Related Activity (LCWRA) | £421.20 | More severe health conditions; awarded after WCA |
| Carer element | £198.31 | Providing 35+ hours/week of unpaid care to a severely disabled person |
How earnings reduce Universal Credit — the taper
UC uses a 55p in the pound earnings taper: for every £1 you earn above your work allowance, your UC payment falls by 55p. You keep 45p of every pound earned above the work allowance, which means UC always rewards work.
The work allowance is the amount you can earn before the taper starts:
| Your UC award includes... | Monthly work allowance |
|---|---|
| Housing element | £404 |
| No housing element | £673 |
| Single with no children (no housing) | £0 — no work allowance |
How to calculate your Universal Credit award
Use this step-by-step approach to estimate your UC payment:
Step-by-step UC calculation:
- Step 1: Add up your UC elements — standard allowance + housing + children + any other applicable elements.
- Step 2: Identify your work allowance (£404 or £673 per month, or £0 if no children and no housing element).
- Step 3: Calculate your net earnings — take-home pay after tax, NI, and pension contributions.
- Step 4: Subtract your work allowance from net earnings. Multiply the result by 55% — this is the taper deduction.
- Step 5: Subtract any other income deductions (savings over £6,000, other benefits).
- Step 6: UC award = total elements (Step 1) minus taper deduction (Step 4) minus other deductions (Step 5). If the result is negative, your award is zero.
Capital and savings rules
Savings above £6,000 reduce your UC award by £4.35/month for every £250 (or part of £250) above £6,000. This is the "tariff income" rule — it assumes you earn income from your savings at a standard rate, regardless of actual interest. If your savings reach £16,000 or more, you are not eligible for UC at all.
| Total savings | Monthly UC reduction |
|---|---|
| Up to £6,000 | £0 — no reduction |
| £6,001–£6,250 | £4.35 |
| £6,251–£6,500 | £8.70 |
| £8,001–£8,250 | £39.15 |
| £10,001–£10,250 | £87.00 |
| £16,000+ | Not eligible |
Legacy benefits vs Universal Credit — should you migrate?
If you are still on legacy benefits (Housing Benefit, Tax Credits, etc.), you will eventually be asked to move to UC via Managed Migration. If your UC entitlement would be less than your legacy benefit entitlement at the point of migration, you get Transitional Protection — a top-up that is eroded over time as your UC award rises.
You should NOT voluntarily switch to UC unless you have checked that you will be better off — for example, if you start work and need a system that adjusts monthly. Use the Policy in Practice benefit calculator or speak to Citizens Advice before switching.