The cost of living in the UK is at an all time high in the UK, so there is no shame in needing support in covering your expenses, especially if you are the sole head of a household and raising children. When I became a single mum I did not utilise my access to state support and over the last years and months I have gradually improved my financial situation to a place that I do not qualify for it now, but I wish I had been more proactive in seeking support when I needed it most, rather than almost completely burning out working every hour of the day as a new single mum. The first piece of advice I give to new single mums is to find out what help and support is out there for them. You can read my full guide to benefits for single mums here, and below I talk through the basics of universal credit, so you can see if it might be an avenue of support for you.
What is Universal Credit?
Universal Credit is a comprehensive welfare benefit system in the UK designed to support individuals and families with low incomes or those who are out of work. It replaces the following six legacy benefits: Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, and Working Tax Credit.
How does Universal Credit work?
Universal Credit is paid monthly (or twice a month for some people in Scotland) directly into your bank account. The amount received depends on your circumstances, including income, savings, and household composition. It includes support for housing costs, children, and childcare, as well as additional amounts for disability or caring responsibilities. In general, if you have over £16,000 in savings you will not qualify, whereas if you have below £6,000 in savings you may be able to claim the maximum amount, depending on other financial circumstances.
Who qualifies for Universal Credit?
To be eligible for Universal Credit, you must:
- Be 18 or over (with some exceptions for 16-17 year olds)
- Be under State Pension age
- Live in the UK
- Have less than £16,000 in savings
- Be out of work or on a low income
What is the upper salary limit for claiming Universal Credit?
There is no specific salary range that automatically qualifies or disqualifies someone for Universal Credit in the UK. Eligibility depends on various factors including income, savings, and individual circumstances. However, as your earnings increase, your UC payment gradually decreases. For every £1 you earn from working, your Universal Credit payment goes down by 55p. This is known as the “taper rate”.
Some people are eligible for a “work allowance” – an amount they can earn before deductions start to be made from their Universal Credit. The monthly work allowance is £379 if you get help with housing costs. The work allowance applies if you are responsible for a child or have limited capability for work.
There’s no limit to how many hours you can work while claiming Universal Credit. Payments are calculated based on earnings, not hours worked. The total amount of benefits you can receive is capped at: £25,323 a year for couples and single parents in Greater London, and differs by region based on living costs.
Eligibility and payment amounts are calculated based on individual circumstances. To get an accurate estimate of potential Universal Credit entitlement, it’s recommended to use a benefits calculator or consult with a benefits advisor.
How do you apply?
The application process for Universal Credit is primarily online. After using a benefits calculator to see how much you might be entitled to, you can follow these steps.
- Set up an online account at GOV.UK
- Complete the online application form, providing details about your circumstances, income, and housing costs (you’ll need to add income such as CMS payments, too)
- Verify your identity online or in person
- Book and attend an appointment with a work coach
- Agree to a set of commitments to receive your payments
If you need help applying, you can contact the Universal Credit helpline or use the Citizens Advice Help to Claim service.
Benefits of UC for single mothers
Universal Credit can be particularly helpful for single mothers in the UK for several reasons. Firstly, it adapts to changes in circumstances, making it easier to manage varying income from part-time or flexible work. Universal Credit can cover up to 85% of childcare costs, making it easier for single mothers to work or increase their working hours. Single parents also receive a work allowance, allowing them to earn a certain amount before their Universal Credit payment starts to reduce. The online system allows for easy management of claims, reporting changes, and communicating with work coaches.
Universal Credit also includes an element for housing costs, which can be crucial for single mothers managing household expenses, or figuring out how they can afford to set up separate households when separating from their children’s other parent.
Don’t be afraid to seek the help and support you need.
Main photo by Diane Helentjaris on Unsplash