Benefits & tax

Universal Credit (UC) has replaced the legacy benefits for most working-age claimants. It's paid monthly and tapers as you earn — for every £1 of net earnings above your work allowance, your UC reduces by 55p.

You can claim UC whether you're in or out of work, as long as your income and savings are below the thresholds. Savings above £6,000 reduce the award; above £16,000 you usually can't claim.

Rent help for most working-age tenants is the Universal Credit housing element, not a new Housing Benefit claim. Private rents are capped by Local Housing Allowance. Extra shortfall help in England is a Crisis and Resilience Fund Housing Payment from April 2026. Full cluster: Housing Benefit, LHA and extra housing payments.

From 1 July 2026, new working-age Housing Benefit is only for specified, supported, sheltered or temporary housing. Pension-age renters still claim Housing Benefit from the council. Everyone else claims Universal Credit and the housing element.

Local Housing Allowance is a cap on how much rent the state will treat as eligible in your Broad Rental Market Area — look up rates on LHA Direct. If there is still a shortfall, England uses a Housing Payment; Wales keeps Discretionary Housing Payments. How to apply: extra housing payment or DHP.

Your tax code tells your employer how much tax-free pay you're entitled to. The standard code for 2026/27 is 1257L — meaning a £12,570 personal allowance. Common reasons for a wrong code include having two jobs, recently retiring, or HMRC carrying forward an old benefit-in-kind.

Check your code on your payslip, in your Personal Tax Account or on the HMRC app. If it's wrong, you may have overpaid tax for years — reclaim through HMRC.

If one partner earns under £12,570 and the other is a basic-rate taxpayer, the lower earner can transfer £1,260 of their personal allowance — saving the couple up to £252 a year. You can backdate four tax years. Free to apply at gov.uk.

Council Tax Reduction is administered by your local council and can cut your bill by up to 100% depending on income. A single-adult household also gets a 25% discount automatically — never pay full Council Tax if you live alone.

Severely Mentally Impaired (SMI) discounts can wipe up to 100% off the bill for households where a resident has a qualifying condition such as advanced dementia. It's often missed; ask your council.

Pension Credit unlocks free TV licences over 75, cold-weather payments, council tax reductions and more — yet a third of eligible pensioners don't claim. Healthy Start vouchers, free school meals, Warm Home Discount, and the Household Support Fund are similarly under-claimed. Use the free benefits calculator at entitledto.co.uk or Turn2us.

PIP helps with extra costs caused by long-term health conditions or disability. It's not means-tested and not affected by savings or earnings — it depends entirely on how the condition affects daily living and mobility. There are two parts (Daily Living and Mobility), each at a standard or enhanced rate.

PIP can also unlock other benefits: extra Universal Credit, Council Tax reductions, Carer's Allowance for someone who looks after you, and a Blue Badge. See our PIP guide for the points system, 2026/27 rates and how to claim PIP. Young people on DLA must claim PIP at 16 — PIP at 16. New Style ESA is separate income-replacement money if you cannot work as much — New Style ESA.

Under-16s do not claim PIP. An autistic child may instead get Disability Living Allowance (England, Wales, NI) or Child Disability Payment (Scotland) if they need much more looking-after or help getting about than other children their age. Awards are needs-based — a diagnosis helps as evidence but is not required. Full guide: UK benefits for a child with autism.

That award can unlock Carer's Allowance for a parent, extra Universal Credit disabled-child amounts, higher Tax-Free Childcare, Blue Badge and Motability. Scotland uses Child Disability Payment instead of DLA. At 16 the claim changes: PIP at 16 (or Adult Disability Payment in Scotland). Keep the under-16 stack at UK benefits for a child with autism. Parent-written map: [financial support](autismparentguide.org/daily-life/financial-support*). DLA explainer: DLA for children.

Carer's Allowance is paid if you care for someone for at least 35 hours a week and they receive certain disability benefits. The earnings limit is uprated each April — check gov.uk for the current weekly cap after tax and NI. It counts as taxable income and overlaps with other benefits — run a benefits calculation before claiming.

If you don't qualify for Carer's Allowance (e.g. you earn too much), Carer's Credit protects your State Pension record while you provide 20+ hours of care a week. Our Carer's Allowance guide explains overlaps, underlying entitlement and how to apply.

Attendance Allowance is tax-free, not means-tested, and helps with care costs after State Pension age. It can unlock Carer's Allowance for a family carer and passported help such as council tax reduction. Our Attendance Allowance guide covers rates, the AA1A form and who qualifies.

Scotland administers its own disability and carer benefits through Social Security Scotland — Adult Disability Payment replaces PIP, and Carer Support Payment is replacing Carer's Allowance for new claims. Universal Credit, State Pension and Pension Credit still follow UK-wide DWP rules.

Wales uses DWP for PIP and most working-age benefits but runs its own Council Tax Reduction framework and Discretionary Assistance Fund for crisis grants. Welsh undergraduates can still receive a partial maintenance grant alongside their loan.

See our Scotland and Wales benefits guides for which agency to contact, plus the regional pages on Council Tax Reduction and Adult Disability Payment.

If you receive tax credits, Housing Benefit, income-based JSA, income-related ESA or Income Support, you'll get a 'Migration Notice' inviting you to claim Universal Credit. You have 3 months from the letter to claim, otherwise legacy benefits stop. Managed migration is scheduled to complete by March 2026.

Most people are better off after migration thanks to Transitional Protection — a top-up that ensures you don't lose money at the point of switching. But it erodes over time as UC rates rise. Get a free benefits check before claiming, especially if you have savings between £6,000 and £16,000 or you're on legacy ESA Severe Disability Premium.

Tax-Free Childcare gives working parents a 20% top-up on childcare costs (up to £2,000/child/year, or £4,000 for disabled children) — pay £8 in, the government adds £2, and you pay your registered childcare provider from the account. Open through gov.uk.

From September 2025, working parents in England get 30 hours per week of free childcare for children from age 9 months to school age (term-time only). Wales, Scotland and NI have their own schemes with different age and hour limits. The two schemes can be combined.