Overview

• The UK government has reduced the maximum Universal Credit debt deduction rate from 25% to 15%, effective April 30, 2025.
• This change benefits 1.2 million households, including 700,000 with children, providing an average annual increase of £420 in retained benefits.
• The Fair Repayment Rate, introduced at the Autumn Budget, aims to ease financial pressures on low-income families by limiting deductions for debts such as overpayments and advances.
• The policy is part of the government's Plan for Change, which seeks to improve living standards and address the ongoing cost-of-living challenges.
• Claimants with assessment periods starting on or after April 30 are already noticing higher payments, as confirmed by recent reports.