When do the new Universal Credit rates apply?

The updated Universal Credit rates kick in from 6 April. Payments reflect the April 6 increase to the standard allowance, which the government says rises above inflation. Households will see changes on their next scheduled assessment period after that date, so timing can vary. Check your online Universal Credit account for exact dates.

How does the DWP health element change for new claimants?

For new Universal Credit claims, the DWP health element will be £217.26 per month, down from £429.80. Existing recipients keep current arrangements until reassessment. The impact on take‑home income will differ by household. The government argues the reform supports moves into work while increasing the main allowance above inflation.

What could this mean for UK retail stocks?

We expect stronger demand in essentials and value channels as budgets prioritise food and bills. Discretionary spending may be softer for groups affected by the health element cut. Execution matters: retailers with clear value, efficient supply chains, and steady pricing power could defend margins better while volumes benefit from the April 6 standard allowance uplift.

How might gilts and sterling react to these reforms?

If reforms lift participation and cool wage growth, markets may price earlier BoE cuts, easing gilt yields. Fiscal savings near £950 million by 2030 to 2031 also help credibility. For sterling, a mix of stable growth and softer inflation is supportive. Weak growth, however, could limit currency gains despite improved fiscal optics.

Global Market Insights

UK Universal Credit Reforms: New Rates, Health Cut — February 10

ByHuzaifa Zahoor February 10, 2026February 10, 2026

The UK’s Universal Credit welfare forms overhaul starts on 6 April, reshaping incentives and cash flows for millions. The government will cut the DWP health element for new claims to £217.26 per month from £429.80, while lifting Universal Credit rates above inflation. Ministers aim to raise labour participation and support consumer incomes. We explain what changes on day one, who gains or loses, and how these shifts could move retail demand, jobs data, gilts, and sterling. Investors should prepare for uneven sector impacts across 2024.