Salford Citizens Advice

Changes to Universal Credit and the national minimum wage.

We welcome the changes to Universal Credit and the national minimum wage that was announced in last week’s budget – even though we don’t think they go far enough, and especially don’t replace the £20 a week cut.

The national minimum wage will change in April so that it is the law that people are paid at least this. The new rates are:

  • £9.50 for those aged 23 or over
  • £9.18 aged 21-22
  • £6.83 aged 18-20
  • £4.81 aged 16-17 

These will come into effect from 1 April 2022.

We are members of the Real Living Wage campaign, and we believe that the national minimum wage should be increased to this level – which is just to be uprated next week at the beginning of Real Living Wage Week from £9.50. So we are nearly there!

The Chancellor also announced changes to the way people lose money from their universal Credit for the extra wages they earn.

Specifically, the taper rate that applies to earnings in Universal Credit will be reduced from 63% to 55%. (Meaning you lose less benefit than was the case).

The work allowance will be increased by £500 a year for households with children or where a household member has limited capability for work.

The temporary increase in the surplus earnings threshold to £2,500 will continue until April 2023 when it will be reduced to £300.

These changes should be introduced by 1 December 2021.

The government had already announced that local councils will receive some extra funding to help where people face extra hardship because of the cut to Universal Credit. If you need help with accessing this then we can help you, just call us on 0808 27 87 802 from 9am to 4 pm Monday to Friday, or afterhours on 0161 850 5053 up to 9pm every night.

Tom Togher

November 4, 2021.