Universal Credit Act 2025
The Universal Credit Act 2025 received Royal Assent on 3 September 2025. It started life as the Universal Credit and Personal Independence Payment Bill, but the PIP clause was removed by government amendment before it passed, so the final Act was renamed to drop PIP from its title. The Act made no changes to PIP rates or descriptors. Its main change was to Universal Credit, splitting the monthly health element into a protected legacy rate (£429.80 a month in 2026/27) and a lower new-claim rate (£217.26 a month).
Policy change · 3 September 2025Royal Assent
The Bill passed its Commons third reading on 9 July 2025 and received Royal Assent on 3 September 2025. By then the PIP provisions (originally clause 5) had already been removed by government amendment, which is why the Act reached the statute book as the Universal Credit Act 2025 rather than under its original PIP-bearing title.
What the Act DID do
- Split the UC health element into a protected legacy rate (£429.80 a month in 2026/27) for existing LCWRA claimants and a lower rate (£217.26 a month) for new claims from 6 April 2026.
- Introduced a "severe lifelong conditions" exemption that preserves the legacy rate for some new claimants.
- Set out the framework for a later review of award durations.
What the Act did NOT do
- Did NOT change the 2026/27 PIP rates (these are set by the Up-rating Order, not the Act).
- Did NOT introduce the proposed 4-point rule; it was removed from the Bill at Commons Report Stage on 1 July 2025 after a 49-strong Labour rebellion.
- Did NOT change PIP descriptors (these remain as set in Schedule 1 of the PIP Regulations 2013).
- Did NOT alter the PIP assessment process or evidence requirements.
What is now under review
Many of the changes originally proposed in the green paper are now sitting inside the Timms Review of PIP, due to report through 2026/27. No changes have been enacted from the Timms Review yet.