2026/27 DWP Universal Credit Rules
Taper rate is 55% (55p reduction per £1 above Work Allowance). Lower Work Allowance: £427/mo (with housing costs). Higher Work Allowance: £710/mo (without housing costs).
UC Earnings Taper Estimator
Calculates UC award reduction from take-home earnings in an assessment period
£
Net earnings after Income Tax and National Insurance received in the assessment period.2026/27 UC Taper Deduction Breakdown
| Effective Monthly Work Allowance | £427 |
| Earnings Subject to 55% Taper | £773.00 |
| Universal Credit Monthly Award Reduction | -£425.15 |
2026/27 Work Allowance & Taper Schedule
| Household Situation | 2026/27 Work Allowance | Taper Rate Above Allowance |
|---|---|---|
| Eligible for Work Allowance + Housing Costs | £427 / month | 55p per £1 |
| Eligible for Work Allowance + No Housing Costs | £710 / month | 55p per £1 |
| No Work Allowance Eligibility | £0 | 55p per £1 from £1 of earnings |
Frequently Asked Questions (6 Detailed FAQs)
The Universal Credit taper rate is 55%. For each £1 of relevant take-home earnings above the applicable Work Allowance, the Universal Credit award is reduced by 55p.
For 2026/27, the lower Work Allowance is £427 a month (with housing costs) and the higher Work Allowance is £710 a month (without housing costs). A Work Allowance is only available if you are responsible for a child/young person or have limited capability for work.
Yes. Earnings received during a Universal Credit assessment period reduce the award by 55p per £1 above your Work Allowance.
Universal Credit uses monthly assessment periods. Some assessment periods can contain an extra payday, which can temporarily reduce or stop your Universal Credit for that month.
For gainfully self-employed claimants past their start-up year, DWP applies a Minimum Income Floor based on National Living Wage x expected hours after tax/NI.
Yes. Capital under £6,000 does not reduce UC. Between £6,000 and £16,000 a tariff-income deduction applies, while capital above £16,000 prevents entitlement.
Official 2026/27 DWP Sources
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2026/27 Key Benchmarks
Taper Rate55% (55p / £1)
Lower Work Allowance£427 / mo
Higher Work Allowance£710 / mo
Capital Limit£16,000