Budget 2024: Universal Credit rule change on debt confirmed with 1.2million to benefit

The move was first reported on earlier this week, with the change expected to benefit 1.2 million households, including 700,000 families with children

The cap on how much can be taken from Universal Credit payments to repay debt has been lowered in today’s Budget.

Labour Chancellor Rachel Reeves has confirmed that the maximum deductions that can be taken from the standard allowance will drop from 25% to 15% from April 2025.

Currently, the DWP and other third parties can deduct 25% of someone’s Universal Credit standard allowance payment to recover any debts someone may have. The move - called the Fair Repayment Rate - is intended primarily to help the worst-off families.

The move was first reported on earlier this week, with the change expected to benefit 1.2 million households, including 700,000 families with children, boosting their incomes by up to £420 a year.

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