Universal Credit calculator.

What is Universal Credit?

Universal Credit (UC) is the main monthly income-replacement benefit for working-age people in the UK. It rolled in across the country between 2013 and 2024, replacing six older benefits in a single payment: Jobseeker's Allowance (income-based), Employment and Support Allowance (income-related), Income Support, Housing Benefit (for most working-age renters), Working Tax Credit and Child Tax Credit.

If you're under State Pension age, on a low income or out of work, and have less than £16,000 in savings, UC is almost certainly the benefit you should check first. Our guide to how Universal Credit is calculated walks through every element and worked examples.

How the calculation works

UC is built from a maximum amount — your standard allowance plus any "elements" (child, housing, carer, disabled child, limited capability for work-related activity) — minus deductions for any income or capital you have above set thresholds.

1. Standard allowance — a base amount based on your age and whether you're single or in a couple. See the table below.
2. Add elements for children, housing, caring responsibilities, disability and (for some) childcare costs.
3. Subtract earnings using the work allowance and the 55p taper: every £1 of net earnings above your work allowance reduces your UC by 55p.
4. Subtract other income (most other benefits, occupational pensions) £1-for-£1.
5. Apply the tariff income rule for savings: £1 of "deemed" income is added for every £250 of capital between £6,000 and £16,000. Above £16,000, UC stops entirely.

The result is your monthly UC award. Payments are made monthly in arrears, into one bank account per household — though couples can ask for split payments in cases of domestic abuse or other risk.

The work allowance and the 55p taper

You can earn a certain amount each month before UC starts being withdrawn. This is the work allowance:

• £411/month if you receive the housing element of UC.
• £684/month if you don't receive the housing element (because, for example, you're a mortgage-holder or live with family).
• The work allowance only applies if you have a child or have limited capability for work. Otherwise, every pound of earnings reduces UC from the first £1.

Above the work allowance, the taper rate is 55%: you keep 45p in every £1 you earn. This is meant to keep work paying — and it does, but the effective marginal rate when you add tax, National Insurance and the loss of free school meals can still feel steep.

Who can claim Universal Credit

To claim UC, broadly you need to be:

• 18 or over (there are limited exceptions for 16- and 17-year-olds, especially care leavers, parents and those without parental support).
• Under State Pension age (currently 66). Mixed-age couples — where one partner is over State Pension age — generally claim UC, not Pension Credit, unless they were already on a pension-age benefit before May 2019.
• Living in the UK with the right to reside.
• Not in full-time advanced education (with exceptions for parents, disabled students and some others — see our benefits overview guide for the rules around students).
• Have £16,000 or less in savings between you and your partner.

The two-child limit

Since 6 April 2017, UC does not pay the child element for a third or subsequent child unless a specific exemption applies (non-consensual conception, kinship care, adoption from local authority care, or multiple births).

The two-child limit doesn't affect Child Benefit, which is paid for every child you're responsible for. It can mean that very similar households receive markedly different total benefit incomes depending on the order their children arrived. The current government has indicated it is reviewing the rule, but until any change takes effect we calculate based on the rules as they stand for 2025/26.

Universal Credit and earnings

Most claimants are either working or expected to look for work. Your "claimant commitment" sets out what you need to do each week (typically up to 35 hours of work-search). The amount you earn affects UC in real time — UC reads your earnings from HMRC's PAYE system if you're an employee, so a higher-earning month means a lower UC payment, automatically.

For self-employed claimants, after a 12-month start-up period UC assumes you earn at least the Minimum Income Floor (the national living wage × your expected hours), even if you don't. This is one of the bigger gotchas in the system; if you're self-employed and considering UC, it's worth running our calculator with both your actual earnings and the floor to compare.