Answers · UK 2025/26
How does the Universal Credit taper rate work in 2026/27?
The Universal Credit taper rate for 2026/27 is 55%, meaning your payment falls by 55p for every £1 you earn above your work allowance. If you do not qualify for a work allowance, the taper applies to all your earnings, so working more always leaves you better off but each extra pound of pay is partly clawed back.
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The taper rate is the speed at which Universal Credit is withdrawn as your earnings rise. For 2026/27 the taper is 55%, so for every £1 you earn after tax and National Insurance above any work allowance, your Universal Credit payment is reduced by 55p. A work allowance is the amount you can earn before the taper starts, and you only get one if you are responsible for a child or have limited capability for work. There are two work allowance levels: a higher one if your award does not include help with housing, and a lower one if it does. If you have no work allowance, every pound of net earnings reduces your payment by 55p from the first pound. Because the taper is based on net earnings, the combined effect of Income Tax, National Insurance and the 55% taper can mean you keep only a fraction of each extra pound, though you are always better off working more than not. For example, if you earn £200 above your work allowance, your Universal Credit drops by £110, leaving you £90 better off. Pension contributions reduce the earnings used in the taper calculation, which can increase your award. The taper does not apply to most unearned income such as some benefits, which instead reduce the award pound for pound. Use a benefits calculator to see how extra hours or a pay rise change your overall income.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.