UK Welfare Reform: Universal Credit Changes Announced in Biggest Overhaul Since Launch

The government has unveiled the most significant reforms to Universal Credit since its nationwide rollout, with changes to the taper rate, work allowances, and mandatory employment support for long-term claimants.

The taper rate will be reduced from 55p to 45p for every pound earned, meaning claimants will keep more of their earnings before benefit is reduced. The work allowance will increase by £50 per month. The government estimates 1.2 million working households will be an average of £1,200 per year better off.

Mandatory employment support will be introduced for claimants on Universal Credit for more than 12 months, requiring weekly job coaching sessions and skills assessments. Claimants who fail to attend without good reason will face escalating sanctions.

Anti-poverty charities have given a mixed response. Child Poverty Action Group welcomed the taper rate reduction but expressed concerns about the sanctions regime. The Resolution Foundation analysis suggests most working claimants will be better off under the new system.

The changes will be phased in from October 2026, with the taper rate and work allowance changes taking effect first. The mandatory employment support regime will be piloted in six regions from January 2027.