Universal Credit Explained

Universal Credit is the main working-age benefit. It replaced six older ones, including Jobseeker's Allowance, Housing Benefit and tax credits, and pays as a single monthly amount.

The standard allowance is £338.58 a month if you're single and under 25, £424.90 single and 25 or over, £528.34 for a couple both under 25, and £666.97 for a couple where either of you is 25 or over. On top of that there are extra amounts for children, caring responsibilities and limited capability for work.

It tapers rather than stopping. As your earnings go up your payment reduces gradually, so taking work doesn't cut you off at a cliff edge.

It's claimed online from the Department for Work and Pensions, and the first payment normally takes about five weeks — which is the part worth planning for.

Who is eligible?

You need to be 18 or over, under State Pension age, and living in the UK. There are some exceptions for 16- and 17-year-olds.

Savings matter. Up to £6,000 is ignored. Between £6,000 and £16,000 your payment drops by £4.35 for every £250. Above £16,000 you can't claim, which is worth knowing if you've just had a resettlement grant or a pension lump sum land.

You can claim while working, because the amount adjusts to your earnings rather than being all-or-nothing.

If you have a partner you claim jointly, and their income and savings count alongside yours.

What benefits does this provide?

  • Standard allowance (monthly): £338.58 single under 25, £424.90 single 25 or over, £528.34 for a couple both under 25, £666.97 for a couple where either is 25 or over.

  • Childcare costs: Up to 85% reimbursed, capped at £1,071.09 a month for one child and £1,836.16 for two or more.

  • Savings taper: Savings up to £6,000 are ignored. Between £6,000 and £16,000 your payment drops by £4.35 for every £250. Above £16,000 you cannot claim.

  • Financial Support: Universal Credit provides a monthly payment to help with living costs, including rent and bills, for those on a low income or out of work.

  • Work Incentives: It encourages employment by allowing claimants to work more hours without losing all their benefits, offering a taper rate where benefits reduce gradually as earnings increase.

  • Housing Assistance: Offers support for housing costs, including rent and mortgage interest, helping to prevent homelessness.

  • Childcare Costs: Provides additional funds to cover up to 85% of childcare expenses, making it easier for parents to work.

  • Disability and Health Support: Offers extra financial help for those with disabilities or health conditions that affect their ability to work.

  • Training and Education: Supports access to training and education programmes to improve skills and employability.

  • Budgeting Advice: Provides access to budgeting and financial planning advice to help manage finances effectively.

How do I apply?

  • Check Eligibility: Ensure you meet the basic requirements, such as being on a low income or out of work, and having savings below a certain threshold.
  • Gather Necessary Information: Prepare personal details, bank account information, income details, and housing costs.
  • Create an Online Account: Visit the official Universal Credit website and set up an account using your email address.
  • Complete the Application Form: Fill out the online application form with accurate information about your circumstances.
  • Book an Interview: After submitting your application, schedule an interview at your local Jobcentre Plus.
  • Attend the Interview: Bring identification and any requested documents to your interview.
  • Receive a Decision: Wait for a decision on your application, which will be communicated through your online account.
  • Manage Your Claim: Use your online account to manage your claim and report any changes in circumstances.

Common questions

How much is Universal Credit a month?

The standard allowance is £338.58 if you are single and under 25, £424.90 single and 25 or over, £528.34 for a couple both under 25, and £666.97 for a couple where either is 25 or over.

How much savings can you have on Universal Credit?

Savings up to £6,000 are ignored. Between £6,000 and £16,000 your payment drops by £4.35 for every £250. Above £16,000 you cannot claim.

Does Universal Credit cover childcare costs?

Yes, up to 85% of your costs, capped at £1,071.09 a month for one child and £1,836.16 for two or more.

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Last reviewed 26 August 2026 by Brittany Belt, Co-founder and COO