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Universal Credit limit change bid to provide extra 12,500 allowance

The proposals would increase payments for many Universal Credit claimants if accepted by the government

[A woman checks her finances]

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A major payment rule change is being proposed for Universal Credit(Image: Getty)

A major change to the Universal Credit rules would increase payments for hundreds of thousands of claimants if the government adopts the scheme. Proposals have been set out to uplift certain allowances, after the DWP benefit was expanded back in April.

Campaigners are urging the UK Government to expand Universal Credit by overhauling its capital limit rules. This comes after an above-inflation increase to the standard allowance in April 2026. In another major pay boost in April, the two-child limit was removed, which expanded the child element to cover every child in a household, not just the first two. Yet the capital rules have stayed the same for the past two decades, last changing in 2006.

Universal Credit limit rules

Under current DWP rules, a claimants savings or investments directly dictate their monthly payments:

• Up to 6,000 - no impact on your entitlement
• 6,000 to 16,000 -Payment reduced by 4.35 per month for every 250 held over 6,000
• Over 6,000 - Complete lost of entitlement.

For claimants with a partner, your combined savings count towards these capital limits, even if your partner does not qualify for Universal Credit. A parliamentary petition is now calling for these limits to be restructured.

The petition message states: "We ask the Government to increase the 6,000 and 16,000 capital thresholds to the value these had in real-terms when they were set in 2006."

Inflation uprating

According to the Bank of England's inflation calculator, if capital limits had risen in line with inflation since 2006:

• The 6,000 lower threshold would stand at approximately 10,700giving claimants an extra 4,700 in savings before deductions begin.
• The 16,000 upper threshold would stand at approximately 28,500allowing an extra 12,500 in savings before eligibility is lost completely.

[A DWP sign]

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Major changes have been set out to increase Universal Credit payments(Image: Getty)

Research from the Resolution Foundation published in April 2025 suggested some 830,000 families were having their payments docked because of the capital rules. Another 1.2 million families had hit the 16,000 limit and so had lost out on their payments altogether.

Higher limits for some claimants

Beyond raising the static limits, the campaign calls for an automatic annual uprating mechanism to adjust the limits every year alongside proportionately higher thresholds for joint claimants. Outlining the core argument for changing the rules, the campaign notes: "Restoring the limits' original real-terms value could allow claimants to build financial resilience.

"Joint claims should have higher limits to reflect that partners may not have access to each others' savings, and reduce barriers for those experiencing financial abuse." The petition is currently open for people to pledge their support online. If it secures 10,000 signatures, government ministers will be required to issue an official response; reaching 100,000 signatures will trigger consideration for a debate in Parliament.

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