April 30, 2025
In a major policy shift, the UK government has slashed the maximum deduction rate on Universal Credit repayments from 25% to 15%, giving over a million households a financial boost of up to £420 per year.
Effective this week, the reform is part of the government’s “Plan for Change,” aimed at easing pressure on low-income families. Around 1.2 million households—700,000 of them with children—will benefit from an average extra £35 per month.
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The move addresses long-standing criticism that the government’s own repayment system was overly harsh, often clawing back large portions of support payments due to advances, overpayments, or administrative errors.
Campaigners welcomed the change but noted that the debts being eased were often created by flaws within the welfare system itself.
“This is a step in the right direction, but more needs to be done to fix how these debts arise in the first place,” said Ruth Owens of the Centre for Social Justice.
The government says the policy will allow claimants to better manage daily costs while still repaying what they owe more fairly.
More help is available at MoneyHelper or Gov.uk.
