The first legacy benefit to be fully phased over to Universal Credit by April, with half a million people affected
The Department for Work and Pensions (DWP) is ringing alarm bells for a hefty half a million Brits on Tax Credits, flagging these payments are due to stop on April 5, with a grand shift to Universal Credit. As part of the department's 'managed migration' strategy, this move is set to herd claimants of six legacy benefits towards Universal Credit by March 2026.
Hundreds of thousands of migration notices have been sent out to those affected over the past few years, spelling out the crucial steps and deadlines to lodge Universal Credit claims. Yet a recent DWP survey found a worrying trend; a hefty 78% of respondents in the migration process claimed to know a little or a lot about Universal Credit, but seven out of ten were completely "unaware" of the transitional protection—essentially a safety net set up to ensure no one is strapped for cash due to the switch.
If you're currently receiving more from the DWP on legacy benefits than you would under standard Universal Credit rules, you could be eligible for transitional protection to top up your income. For instance, if you're getting £800 from Tax Credits but are only entitled to £600 Universal Credit, you can receive a transitional protection of £200 to bring your total Universal Credit entitlement to £800.
However, this protection is only available if you apply by the deadline date stated in your migration notice letter. You can still switch to Universal Credit after this deadline, but you won't get the same protections.
The survey found that the most common reasons for delaying the Universal Credit claim were frustration with having to move or wanting to stay on tax credits as long as possible. Yet, nearly half of those surveyed ended up applying for Universal Credit once their tax credits stopped, with 44% admitting they needed the money.
READ MORE: People on PIP may be able to boost payments by up to £8,091 this yearREAD MORE: Woman smashes up hatch at fuel station with hammer in early hours rampageA whopping 91% of participants had already made significant financial decisions based on their tax credits stopping. Over half had reduced their spending, while slightly fewer had started dipping into savings or working extra hours; 28% had resorted to credit cards and overdrafts and an additional 23% had sought financial help from family and friends. The survey uncovered that a staggering three quarters of participants were not claiming Universal Credit due to their personal situations, with in-depth interviews revealing they "often self-assessed" themselves as ineligible.
Many thought they earned too much or had excessive capital. But the DWP report disclosed a concerning trend: these individuals reached their conclusions "without verifying this against external information sources or by making a claim".
This suggests numerous people might be missing out on benefits they're entitled to by simply presuming they don't qualify. For more details on managed migration and actions to take upon receiving a migration notice, visit the gov.uk website.
The list of legacy benefits transitioning to Universal Credit includes Child Tax Credits, Housing Benefit, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, and Working Tax Credits.
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