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Universal Credit shake-up explained: Millions face payment changes – who wins and who loses from 2026 reforms
Vicky Parry
10th Feb 2026
Millions of UK households could see their Universal Credit payments change under sweeping welfare reforms announced this week, in what is being described as one of the biggest shake-ups to the benefits system in years.
The changes aim to encourage more people into work and simplify disability support — but they are already sparking concern that some vulnerable claimants could lose significant financial support.
Here’s what the reforms mean in real terms and who is most likely to be affected.
The biggest change: Health-related payments will be reduced for new claimants
One of the most controversial reforms targets the Universal Credit health element, which provides extra financial help to people whose long-term health conditions limit their ability to work.
From April 2026:
• New claimants could see this payment fall from roughly £429 per month to around £217
• Existing claimants are expected to keep their current payments
• People with severe or terminal conditions are likely to remain protected
The Government says the change is designed to remove financial barriers that may discourage people from entering employment and to create a system that focuses more heavily on disability benefit assessments.
However, welfare organisations have warned the reduction could leave some people with complex health conditions struggling financially.
Some Universal Credit payments will actually rise
Despite the cuts to health-related support for new claimants, the Government is increasing the core Universal Credit allowance.
This includes:
• Above-inflation increases to the main payment
• Around £21 extra per month for a single claimant aged 25 or over
• Larger overall gains for couples and families
These increases form part of a broader plan to make employment financially worthwhile while supporting those actively seeking work.
Work rules are also tightening
The reforms also introduce stronger job-search expectations for some claimants.
New measures include:
• Increased engagement with Jobcentre employment schemes
• Earlier intervention for people who have been unemployed for several weeks
• Expanded access to training and work-placement programmes
Ministers argue the changes will help reduce long-term unemployment and boost workforce participation.
Families may benefit from scrapping the two-child limit
One of the most financially significant changes for households is the planned removal of the two-child benefit cap.
From April 2026:
• Families will be able to claim support for all children
• Hundreds of thousands of households are expected to gain financially
• Experts say it could help reduce child poverty rates
Why the Government is reforming Universal Credit
Universal Credit now supports millions of people across the UK, and spending on health-related benefits has risen sharply in recent years.
The Government argues the current system can unintentionally discourage employment and needs modernising to better support people back into work while protecting those who cannot.
Who is most likely to benefit
✔ Claimants receiving the standard Universal Credit allowance
✔ Families with more than two children
✔ Some jobseekers accessing new employment support schemes
Who could lose out
⚠ New claimants with long-term health conditions
⚠ People who may not qualify under tighter disability assessment rules
When the changes start
Most major reforms are expected to begin rolling out from April 2026, although further adjustments could follow over the next few years.
What claimants should do now
Experts recommend checking entitlement using official benefits calculators and keeping up to date with announcements, particularly if you expect to make a new claim or have a health condition that affects your ability to work.
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