UC rollout expected to complete by September 2025

The Office for Budget Responsibility expects the rollout of Universal Credit to be completed by September 2025, excluding the managed move of some income-based Employment and Support Allowance claimants, according to its welfare spending forecast published on 19 January 2024¹. The OBR said this is eight years later than originally planned, with UC originally intended to have been fully rolled out by 2017-18¹.

The OBR's figures cover UC together with the benefits it replaces: working tax credit, child tax credit, working-age housing benefit, income-based employment and support allowance, income-based jobseeker's allowance and non-incapacity income support¹. Entitlement is tapered with net income at a single rate of 55 per cent, following a reduction from 63 per cent announced in the Autumn 2021 Budget, alongside a £500 per year increase to work allowances¹. For some claimants tapering begins once income exceeds a monthly work allowance; others have their award tapered from the first pound of income¹.

UC and legacy benefit spending is forecast to be £80.9 billion in 2023-24, up from £73.4 billion in 2022-23 and slightly above the cash-terms high of £80.4 billion in 2020-21¹. Spending on UC alone is expected to be £51.2 billion in 2023-24, up from £42.6 billion in 2022-23, and is forecast to reach £88.1 billion in 2028-29¹. UC and its predecessors are expected to account for 27 per cent of total welfare spending in 2023-24, slightly below their 28 per cent share in 2022-23¹.

UC is expected to rise from 58 per cent of total UC and legacy spending in 2022-23 to 63 per cent in 2023-24, and the OBR forecasts it to reach 86 per cent of that total in 2028-29¹. Spending on UC and its predecessors has risen from around £12 billion in 1985-86 to £78 billion in 2023-24 in cash terms, representing around 3.0 per cent of GDP in 2023-24, just above its 1985-86 level of 2.9 per cent¹.

The OBR also lists other changes, including limiting the child element of UC to two children and removing the family element for new claims, announced in the July 2015 Budget, and reforming the Work Capability Assessment by removing the "mobilising" descriptor and amending the "substantial risk" and "getting about" descriptors in the November 2023 Autumn Statement¹. Local housing allowance was raised to the 30th percentile of local rents in 2024-25 before being frozen again in cash terms from 2025-26 onwards¹.

Why it matters for households

The completion date matters to households still on legacy benefits, because the managed move to Universal Credit is what ends those awards. The OBR's September 2025 date excludes some income-based ESA claimants, whose managed move was delayed until April 2028¹, so those households are not covered by the 2025 completion point. The taper rate and work allowance changes set out above determine how much of an award is withdrawn as earnings rise, and the Minimum Income Floor applies to some self-employed claimants¹. The OBR notes that a single, unified benefit should mean take-up of some elements is higher than in the legacy system, since a claimant completing the application form in full will automatically receive all the elements to which they are entitled¹.

What happens next

The OBR's forecast was published on 19 January 2024 and reflects information available at the time of the November 2023 Economic and fiscal outlook¹. It states that the rollout, excluding that for some income-based ESA claimants, is expected to be completed by September 2025, and that the managed move of income-based ESA claimants on UC has been delayed until April 2028¹. No further dates for individual claimant groups are given in the forecast.