The government has announced sweeping reforms to the welfare system, including what experts describe as the largest permanent real-terms increase to the main rate of out-of-work support since 1980.
According to the Institute for Fiscal Studies (IFS), the uplift will benefit nearly four million households, adding up to £725 a year in cash terms for a single person aged 25 or over by 2029/30.
‘Life-changing reforms’
Work and Pensions Secretary Liz Kendall said the reforms would “change the lives of people across the country”.
She added:
“We are giving extra support to millions of households, while offering disabled people the chance to work without fear of the repercussions if things don’t work out.
As part of our commitment to protect the most vulnerable and severely disabled, 200,000 in the Severe Conditions Criteria group — individuals with the most severe, lifelong conditions who are unlikely to recover — will not be called for a Universal Credit reassessment.
All existing recipients of the Universal Credit health element, as well as new customers with 12 months or less to live or who meet the Severe Conditions Criteria, will also see their standard allowance combined with their UC health element rise at least in line with inflation every year from 2026/27 to 2029/30.
This means they can live with dignity and security, knowing the reforms to the welfare system mean it will always be there to support them.”
Bank holiday payments brought forward
The Department for Work and Pensions (DWP) has also confirmed changes to benefit payment dates over the August bank holiday weekend.
Payments originally due on Saturday 23, Sunday 24 and Monday 25 August 2025 will instead be made early on Friday 22 August 2025.
This applies across the whole UK, including Scotland, which has separate bank holiday arrangements but follows the same principle.
Affected benefits include:
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Carer’s Allowance
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Child Benefit
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Disability Living Allowance
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Employment and Support Allowance
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Income Support
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Jobseeker’s Allowance
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Pension Credit
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Personal Independence Payment (PIP)
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State Pension
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Tax Credits
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Universal Credit
The DWP reminded claimants that while some may receive their payments early, “the money will have to last longer, as payment dates will return to normal afterwards.”
