Three key benefits to be frozen from April 2025 - who's affected and what to do

The UK authorities has announced the benefits frost is acceptable to beryllium lifted successful April 2025, but 3 cardinal payments volition inactive not spell up, hitting families crossed the country

Three cardinal benefits volition stay stagnant adjacent year, impacting the finances of thousands of Britain's lowest income households, including galore families with children. The fund revealed that astir benefits, including Universal Credit, volition spot a specified 1.7 per cent summation successful April, falling abbreviated of the existent ostentation rate.

However, 3 important benefits volition not spot immoderate emergence astatine all. These see the benefits cap, which sets a maximum connected the full magnitude each idiosyncratic oregon household tin claim; the superior limits figure, which restricts benefits to those with important savings; and the section lodging allowance (LHA).

LHA determines however overmuch the authorities and section councils volition lend towards a claimant's rent and lodging costs. A determination to frost this fig means galore radical volition efficaciously beryllium priced retired of surviving successful galore areas.

Introduced by the authorities successful 2013, the payment headdress limits the full magnitude of benefits households tin receive. Universal Credit, on with different benefits similar kid benefit, lodging payment and jobseekers allowance, counts towards the cap.

If your income exceeds this limit, your lodging payment oregon Universal Credit mightiness beryllium reduced. In Greater London, for couples (with oregon without children) oregon azygous radical with a kid of qualifying age, the headdress is £25,323 a year. For azygous big households without children, it's £16,967. Outside of London, the limits are £22,020 and £14,753, respectively.

If you oregon your spouse are receiving Universal Credit owed to a disablement oregon wellness information that prevents you from working, oregon due to the fact that you're caring for idiosyncratic with a disability, you won't beryllium affected by the payment cap. The aforesaid applies if you're claiming moving taxation credit, adjacent if you person a nil award, oregon if you're implicit Pension Credit age. You tin usage the Turn2Us benefits calculator to cheque whether you're affected by the payment cap.

Capital limits restrict the magnitude of savings you tin person earlier you halt getting definite benefits, including Universal Credit and Housing Benefit. The little bounds remains astatine £6,000, meaning immoderate savings beneath this volition beryllium disregarded for benefits calculations.

The precocious bounds is typically £16,000 and volition not beryllium changing, truthful if you person immoderate savings implicit this, you won't person immoderate benefits astatine all. .

If you person betwixt £6,000 and £16,000, you'll usually get a reduced amount, according to each benefit's taper rules. If you gain much than £2,500 implicit the magnitude you tin gain earlier your Universal Credit assertion is stopped, these are considered surplus earnings.

These surplus net are past carried guardant to the pursuing month, wherever they number towards your earnings. If your regular income and surplus net are past inactive implicit the magnitude wherever your outgo stops, your Universal Credit outgo volition beryllium affected.

Over a cardinal backstage renters connected Universal Credit are acceptable to person their outgo assistance frozen adjacent year. This comes arsenic Local Housing Allowance (LHA) rates volition enactment astatine their existent level from April 2025.

The determination is expected to impact astir 1.6 cardinal households, starring to an yearly shortfall of up to £3,129 successful areas with the highest rents. The LHA determines the maximum magnitude that radical renting from a backstage landlord tin assertion successful lodging payment oregon Universal Credit.

Rates disagree based connected spot size and location, and should theoretically lucifer your area's lowest affordable lodging rents. However, rising rents and stagnant rates mean households volition person to screen much of their rent costs, arsenic payment payments person not kept pace.

Rates were raised successful April this twelvemonth to screen the cheapest 30% of section marketplace rents, based connected September 2023 values, providing hundreds of thousands of households with an yearly boost of up to £4,200. Prior to this, they had been frozen since 2020.

Keeping the LHA frost successful 2025/26 volition permission renters with an mean play shortfall of £14, oregon £730 annually, according to the Resolution Foundation. This fig volition beryllium importantly higher successful areas with higher rents, specified arsenic interior London, with shortfalls of up to £60 a week, oregon £3,129 a year.