Reg. 07380272 · England & Wales · Est. 2010
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Net Monthly Entitlement
£653.45
Annual Equivalent
£7,841.40
Maximum UC
£1,093.45
per month
Deductions
£440.00
per month
Everything you need to know about Universal Credit in the UK
What is Universal Credit?
Universal Credit (UC) is a single monthly payment for people on a low income or who are out of work. It replaces six legacy benefits: Housing Benefit, income-related Employment and Support Allowance (ESA), income-based Jobseeker's Allowance (JSA), Child Tax Credit, Working Tax Credit, and Income Support. UC is paid monthly in arrears as a single household payment, combining all the elements you are entitled to into one amount. It is administered by the Department for Work and Pensions (DWP) and is available to working-age adults in the UK.
How does the earnings taper work?
For every £1 you earn above your work allowance, 55p is deducted from your Universal Credit payment. This is known as the earnings taper and is set at 55.0%. The taper ensures that you are always better off working than not working — you keep 45p of every extra pound earned. If you do not have a work allowance (because you have no children and no disability), the taper applies from the first pound of net earnings. The taper is applied to your net monthly earnings after tax and National Insurance.
What is the work allowance?
The work allowance is the amount you can earn before the 55% taper starts reducing your UC. You qualify for a work allowance if you have dependent children or have limited capability for work. If you receive the housing element, the work allowance is £404.00 per month. If you do not receive the housing element, the work allowance is higher at £673.00 per month. If you have no children and no disability, there is no work allowance and the taper applies from the first pound of earnings.
How does capital affect UC?
Capital (savings and investments) below £6,000.00 is completely ignored. For capital between £6,000.00 and £16,000.00, a tariff income of £1 per month is assumed for every £250 (or part of £250) above £6,000.00. This deemed income reduces your UC entitlement. If your capital exceeds £16,000.00, you are not eligible for Universal Credit at all. Your main home is not counted as capital, but other property, savings accounts, and investments are included.
Key Thresholds
Standard Allowance (Single 25+)
£393.45 per month for a single person aged 25 or over.
Standard Allowance (Couple 25+)
£617.60 per month for a couple both aged 25 or over.
Capital Lower Limit
First £6,000.00 of savings is completely ignored in the assessment.
Capital Upper Limit
Capital above £16,000.00 means you are not eligible for UC.
DWP-Aligned: This calculator uses official DWP rates and thresholds for the 2025/26 tax year (6 April 2025 – 5 April 2026). Results are indicative — for complex situations, consult a qualified adviser or contact your local Jobcentre Plus.
This calculator uses official rates and thresholds from:
Last verified: February 2026 · Tax year 2025/26. Results are indicative — consult a qualified accountant for personalised advice.
Reviewed by M. Samiuddin Quadri, ACCA — Chartered Certified Accountant at Gladstone & Co. · Updated for the 2025/26 tax year.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms