Millions of households across the UK are set to see significant changes to their income from the Department for Work and Pensions (DWP) throughout 2026. With an estimated 24 million people currently receiving some form of state support, these adjustments to benefits like Universal Credit, Personal Independence Payment (PIP), and the State Pension will have a widespread impact.
Major Milestones: The End of Legacy Benefits and New Rules
The coming year marks a pivotal moment in the welfare system. According to an updated guide from the charity Turn2us, all legacy benefits will officially end on 31 March 2026. This means payments for these older-style benefits will cease entirely after this date, completing the long-term transition to Universal Credit.
From April 2026, a suite of reforms to Universal Credit will come into force. One of the most notable changes is the removal of the two-child limit. This policy shift means families with three or more children will receive an extra child element payment for each additional child, a move announced in Rachel Reeves's autumn budget.
However, not all changes represent an increase. New claimants deemed to have Limited Capability for Work and Related Activity (LCWRA) will see their additional amount reduced from £94 to £50 per week. On a positive note, the maximum support for childcare costs within Universal Credit will rise by £736.06 for each child above the previous two-child cap.
April's Financial Uplift: Rates, Wages, and Pensions
April 2026 will also bring the annual uprating of payments. Most social security benefits across the UK are scheduled to increase by 3.8%. This includes disability benefits like PIP and Attendance Allowance. The State Pension will see a larger boost, with both the New and Basic State Pension rising by 4.8%.
Universal Credit standard allowances will also rise. The new monthly rates from April 2026 will be:
- £338.58 for single claimants under 25 (up from £316.98)
- £424.90 for single claimants aged 25 and over (up from £400.14)
- £528.34 for joint claimants both under 25 (up from £497.55)
- £666.97 for joint claimants both aged 25 and over (up from £628.10)
Wage floors are also increasing. The National Living Wage will rise by 4.1% to £12.71 per hour, while the National Minimum Wage for 18-20 year olds jumps 8.5% to £10.85. Rates for 16-17 year olds and apprentices will increase to £8.00 per hour.
Winter Support and Further Adjustments
The latter part of 2026 will focus on helping vulnerable individuals with energy costs. The Warm Home Discount Scheme will open for applications in England, Scotland, and Wales in October.
From November, eligible pensioners can expect to receive their Winter Fuel Payment or Pension Age Winter Heating Payment. Cold Weather Payment schemes will also activate in England, Wales, and Northern Ireland, with Scotland delivering its Winter Heating and Child Winter Heating Payments.
Other notable changes include new taxes on cars leased through the Motability Scheme, alongside restrictions on certain vehicle brands. Turn2us cautions that while some changes are fixed, others may be introduced gradually, and advises claimants to stay informed.
