Spring Statement commits to above-inflation UC standard allowance increase from April 2026

The Spring Statement committed to an above-inflation increase of around 2 per cent in the standard allowance of Universal Credit (UC) from April 2026, according to the Resolution Foundation¹. The commitment was made in the week before 3 April 2025¹. The Resolution Foundation said the increase should be brought forward to October 2025, at a one-off cost of around £400 million¹.

The commitment sits alongside this year's uprating. Most non-pensioner benefits rose by just 1.7 per cent in April 2025, adding £80 a year to basic single adult support, which the Resolution Foundation said is considerably less than expected inflation in 2025-26 of 3.2 per cent¹. The National Institute of Economic and Social Research (NIESR) said the 1.7 per cent rise in the UC standard rate amounts to £6.69 a month for a single person over 25². The standard allowance for UC in 2024/25 was £393.45 a month for a single person aged 25 or over, rising to £400.14 in April 2025; for a couple aged 25 or over the rate was £617.60, rising to £628.10 in April 2025².

Local Housing Allowance (LHA) rates, which determine the housing element of UC for private renters, remained frozen from April 2025¹. The Resolution Foundation said a continued link to rents would have meant a typical 9 per cent boost, or an average of around £800 a year for two-bedroom properties¹. NIESR said LHA rates have been frozen for seven of the last 14 years and are frozen again from April 2025². NIESR also said LHA rates were set on the median of local rents when introduced in 2008 and reduced to the 30th percentile in 2011, and that it is not mandatory for landlords to provide the tenancy information used to calculate them².

NIESR said the 2025 Spring Statement "seems to promise little improvement", noting the 1.7 per cent rise in the UC standard rate alongside announced cuts to health-related benefits, which it said are projected to push a further 250,000 people, including 50,000 children, into poverty².

Why it matters for households

The 2 per cent commitment applies to the UC standard allowance from April 2026, so it does not change the amount paid in 2025-26¹. For the current year, the Resolution Foundation projected that real median non-pensioner household income will fall by 1 per cent, or around £400, in 2025-26, while the income of the poorer half may fall by 2 per cent¹. It estimated the combined impact of frozen personal tax thresholds and the increase in employer National Insurance at an income loss of around £170 for a typical household in 2025-26 relative to a world of no tax rises¹.

Other April 2025 changes affect household bills. The Resolution Foundation said the annualised energy price cap rose by £111, the first time energy prices have pushed up inflation since the third quarter of 2023¹. It said households in England and Wales face an average water bill rise of 26 per cent, or around £120 a year, and as high as 47 per cent for Southern Water customers¹. Council Tax rose by 5 per cent across most of England, similarly in Northern Ireland, 7 per cent in Wales and 9 per cent in Scotland, which the Resolution Foundation said amounts to an income fall of £80 a year in cash terms for the typical household¹.

For private renters on UC, the frozen Local Housing Allowance means the housing element does not follow rent increases this year¹. The 1.7 per cent rise applies to most non-pensioner benefits, and the annual uprating for April 2026 will reflect whatever is confirmed for the UC standard allowance¹.

What happens next

The around 2 per cent increase in the UC standard allowance is due to take effect from April 2026¹. The Resolution Foundation said it should be brought forward to October 2025, at a one-off cost of around £400 million¹. NIESR recommended removing the two-child limit, which it said would cost around £2 billion a year and reduce the number of people in poverty by 1.7 million, and setting LHA rates to average local rents, which it said would cost £2.1 billion in 2025/26 and reduce child poverty by approximately 70,000². No further dates for these measures have been reported.