UK Households on Benefits Handed £725 Cash After Law Change

The UK government has announced a significant change in benefits through the Universal Credit Bill, set to provide an annual income increase averaging £725 for nearly four million households. This marks the first time in decades that the Universal Credit standard allowance will rise above inflation, with the highest real terms increase in out-of-work support since 1980, according to the Institute for Fiscal Studies (IFS).

However, alongside this boost, there are controversial reductions in other benefit areas. Starting from April 2026, the health top-up for Universal Credit will decrease to £50 per week from the current monthly rate of £423.27 under the Limited Capacity for Work Related Activity benefit. New claimants signing up for the "limited capability for work and work-related activity" payment after April 2026 will receive lower rates unless they meet specific severe conditions or are terminally ill—a change opposed by some Labour MPs.

Labour MP Rachael Maskell criticized the reforms, expressing concerns about their impact on equality and justice, describing the government's decision-making as chaotic. Independent MP Zarah Sultana, who recently left Labour, also condemned the government, accusing it of prioritizing billionaires and big business over the needs of disabled people.

In defense, Work and Pensions Secretary Liz Kendall argued that these reforms aim to create fairness and break the cycle of dependency, providing additional support to millions of households and enabling disabled individuals to work without fear of losing benefits.

Overall, the reforms are poised to significantly impact households across the UK, sparking debate and criticism within Parliament over their broader implications.