Full list of major changes to Universal Credit and benefits in 2025 including pay rise
HOUSEHOLDS claiming Universal Credit and other benefits should be aware of the following changes.
The government has plans to shake up the benefit system in 2025 – including a pay rise for claimants and more free childcare.
That’s why it is worth making note of the following changes that are set to take place from the new year so you are not blindsided.
Below we round up all the major changes to Universal Credit and benefits.
Household Support Fund ends – March 31 2025
The Household Support Fund will end on March 31 2025, after being extended multiple times.
Through the fund, vulnerable households can claim support to help with the cost of living.
The funding is supplied from a £421million pot by the Department for Work and Pensions.
It was first introduced in October 2021 and has been extended five times.
Councils get a portion of the cash based on their population, size, catchment area, and need, which they allocate to vulnerable households.
It is worth checking in with your local council to see if you can claim any extra help before the scheme closes.
Tax credit service scrapped -April 5
Tax credits will end on April 5 2025 and be replaced with Universal Credit.
This is because legacy benefits – such as Tax Credits, Housing Benefit, Income Support, Jobseeker’s Allowance and Income-Related Employment and Support Allowance – are all being phased out.
As part of this move, claimants of tax credits will be moved to Universal Credit by the end of April 2025.
Anyone moving from tax credits to Universal Credit can find help in a number of ways.
You can visit your local Jobcentre by searching at find-your-nearest-jobcentre.dwp.gov.uk/.
There’s also a free service called Help to Claim from Citizen’s Advice.
- England: 0800 144 8 444
- Scotland: 0800 023 2581
- Wales: 08000 241 220
You can also get help online from advisers at citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.
Deadline to pay voluntary National Insurance Contributions – April 5
Workers have until April 5 2025 to buy back any missing National Insurance years from 2006-2016.
These NI contributions are essential to making sure you get the maximum amount of state pension.
It is not uncommon for workers to choose to buy years they were missing to ensure they meet the full qualifying years for the state pension.
You usually need 35 years of National Insurance contributions to qualify for the full state pension, which is £221.20 a week.
Usually, there are strict time limits on buying back these years.
But when the new state pension was introduced back in 2016, it was relaxed to help people with the transition.
This was supposed to end in April 2023, but was then extended.
However, from May 2025, you will only be able to buy back six tax years starting from 2019.
State pension to rise – April 7
In April 2025, the state pension will increase by 4.1%, bringing the weekly payment to £230.30.
This increase is based on the triple lock, which sees the state pension rise in line with whatever is highest out of: wages for May to July, 2.5% or September’s inflation figures.
Guaranteed pension credit payments will also go up from £218.15 a week to £221.86, or £332.95 to £338.61 for couples.
These payments are designed to help households on low-income top up their state pensions.
You may also get the “Savings Credit” part of pension credit if both of the following apply:
- You reached state pension age before April 6, 2016
- You saved some money for retirement, for example, a personal or workplace pension
This part of pension credit will rise from £17.01 a week to £17.30 or for couples, from £19.04 to £19.36.
Benefits to rise – April 7
Benefits and Universal Credit will also rise by 1.7% come April.
Rachel Reeves confirmed the uplift when she delivered her Autumn Statement in October.
For example, those single and aged under 25, will see the standard allowance of Universal Credit rise from £311.68 to £316.98.
Meanwhile, joint claimants both under 25, will see the standard allowance rise from £489.23 to £497.55.
Carers Allowance limit to rise – April
The Carers Allowance weekly earnings limit is set to be increased from £151 to a minimum of £181 from April.
The move was confirmed in the Autumn Budget last October and is a boost to the thousands of carers across the UK.
But it is worth noting that if you earn over this figure you could risk losing all your benefit.
This is different to other benefits, like Universal Credit, which has a tapered approach to earnings so that those who do work don’t lose all of their money at once.
It is also important to note that the DWP looks to get any overpaid benefits back.
30 hours of free childcare per week – September 2025
Come September 2025, working parents of children aged nine months and up will be entitled to 30 hours of free childcare per week.
This follows an initiative launched by last September which saw working parents entitled to 15 hours of free childcare.
The programme was set up the the government to help lower the cost of child care for families.
To check your eligibility for the scheme, you can visit, the following website, https://www.gov.uk/check-eligible-free-childcare-if-youre-working.
Winter Fuel Payment in Scotland replaced – November 2025
Over the next few years, the UK government will transfer a number of benefits over to the Social Security Scotland.
One of these includes the Winter Fuel Payment, which is changing for people in Scotland come November.
Come next winter it will be known as the Pension Age Winter Heating Payment.
From 2025, those in receipt of qualifying benefits would get £200 or £300 depending on their age, while all other pensioners would get £100.
Managed migration notices are expected to have been sent – December 2025
All managed migrations are expected to be sent by 2025 as part of the government’s process to end legacy benefits.
The government hopes to convert people claiming the following benefits to Universal Credi by the end of the 2025 tax year, which ends in April.
They are:
- Working tax credit
- Child tax credit
- Income-based jobseeker’s allowance
- Income support
- income-related employment and support allowance
- Housing benefit
Households should look out for a letter called a ‘Universal Credit Migration Notice’ from the DWP.
Between July 2022 and September 30, 2024, the Department for Work and Pensions (DWP) sent almost 1.4 million migration notices.
However, according to the DWP’s latest figures, 318,834 individuals lost their benefits after failing to act on migration notices received between July 2022 and June 2024.
That’s why it’s vital to act on your migration notice within the three-month deadline.
Some 883,944 individuals have since made successful claims for Universal Credit, and another 166,594 are still in the process of transitioning.
Will I be better off on Universal Credit?
AROUND 1.4million people on legacy benefits will be better off after switching to Universal Credit, according to the government.
A further 300,000 would see no change in payments, while around 900,000 will be worse off under Universal Credit.
Of these, around 600,000 are expected to get top-up payments if they move under managed migration, so they don’t lose out on cash immediately.
The majority of those – around 400,000 – are claiming employment support allowance (ESA).
Around 100,000 are on tax credits while fewer than 50,000 each on other legacy benefits are expected to be affected.
Examples of those who may be entitled to less on Universal Credit according to the government include:
- Households getting ESA who and the severe disability premium and enhanced disability premium
- Households with the lower disabled child addition on legacy benefits
- Self-employed households who are subject to the Minimum Income Floor after the 12 month grace period has ended
- In-work households that worked a specific number of hours (e.g. lone parent working 16 hours claiming working tax credits
- Households receiving tax credits with savings of more than £6,000 (and up to £16,000)
But if they don’t switch in the future, they’ll risk missing out on any future increase to benefits and see payments frozen.
Those who move voluntarily and are worse off won’t get these top-up payments and could lose cash.
Those who miss the deadline and later make a claim may also not get this transitional protection either.
The clock starts ticking on the three-month countdown from the date of the first letter, and reminders are sent via post and text message.
There is a one-month grace period after this, during which any claim to Universal Credit is backdated, and transitional protection can still be awarded.