Some of the changes will come as good news
Millions of people will be affected(Image: Richard Williams/South Wales Echo)
April marks the start of the new financial year and with that comes a series of important money changes. Millions of people will be affected by the updates which include adjustments to payment amounts.
Some of these changes will come as good news with the standard allowance set to rise and the two-child limit being scrapped. Other payments are set to reduce for some people as DWP makes moves to rebalance the health element of the benefit. For money-saving tips, sign up to our Money newsletter here.
Here’s what you need to know about the upcoming shifts and how they might affect your finances.
PIP, Disability Living Allowance and Attendance Allowance
The Department for Work and Pensions (DWP) has confirmed that disability benefits, including Personal Independence Payment (PIP), Disability Living Allowance (DLA) and Attendance Allowance will increase by 3.8% for the 2026/27 financial year.
The new weekly payment rates will come into effect on April 6, 2026.
PIP is currently worth between £29.20 and £187.45 per week, with payments usually issued every four weeks which amounts to awards of between £116.80 and £749.80.
An increase of 3.8% will see payments rise to between £30.30 and £194.60, some £121.20 and £778.40 every four-week payment period.
The DWP will issue letters to all claimants before April detailing their new payment rates.
State pension rates
The basic and new state pension will be increased by 4.8%, from April 2026 in line with average weekly earnings up to an additional £575 per year to pensioners depending on their entitlement.
Someone on a full new state pension will see their weekly payment rise to £241.30 per week while someone on the full basic state pension will see their weekly payment boosted to £184.90 per week.
In 2025 the UK Government said it will continue its commitment to the triple lock for the duration of this parliament.
The triple lock guarantees that the state pension increases annually by the highest of inflation, average earnings growth, or 2.5%.
Universal credit standard allowance to rise by a 6.2%
The UK Government announced an increase in universal credit payments as part of the autumn Budget announcement in November.
Benefits typically rise with inflation annually but Rachel Reeves confirmed an additional 2.3% increase to universal credit from April 2026.
This means a single claimant will receive an extra £6 per week, or £312 per year, resulting in an overall above-inflation rise of 6.2%.
The Universal Credit Act 2025 mandates that the benefit will be increased by more than inflation each year until 2030.
Health element rebalancing (two-tier system)
The DWP said it will focus on the rebalancing of universal credit health and standard elements. This means:
Increasing the universal credit standard allowance above inflation for the next four years – worth an estimated £725 by 2029-30 for a single adult aged 25 or over.Reducing the health top-up for new claims to £50 per week from April 2026.Ensuring that all existing recipients of the universal credit health element – and any new claimant meeting the severe conditions criteria and/or that has their claims considered under the special rules for end of life (SREL)– will receive the higher universal credit health payment after April 2026.Exemptions from reassessment for those with the most severe lifelong conditions.Two-child limit scrapped
The UK’s two-child benefit limit on Universal Credit is set to be lifted in April 2026.
The two-child cap prevents households on universal or child tax credit from receiving payments for a third or subsequent child born after April 2017.
The leak of a key document spelling out the UK Government’s plans occurred just before the Budget confirmed the expectation the chancellor would scrap the controversial benefit.