Answers · UK 2025/26
What is the Minimum Income Floor for self-employed Universal Credit claimants in 2026?
The Minimum Income Floor (MIF) is a notional earnings figure used to calculate Universal Credit for self-employed people. In 2026 it is based on the National Living Wage of £12.71/hr multiplied by 35 hours per week and 52 weeks, equalling approximately £23,130 per year. If you actually earn less, UC is still calculated as if you earned that amount, reducing your award.
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The Minimum Income Floor (MIF) is one of the most significant rules affecting self-employed Universal Credit claimants. It was introduced to prevent UC from subsidising businesses that are not financially viable. **How the MIF is calculated** The MIF is based on the National Living Wage (NLW) for your age group multiplied by your expected working hours: - NLW for those aged 21+: **£12.71/hour** (2026/27) - Standard assumed hours: **35 hours/week** - MIF = £12.71 x 35 x 52 = **£23,130/year** (approx £1,927/month) For part-time workers the MIF is adjusted proportionally based on your agreed hours. **How it affects your UC payment** If your actual self-employed earnings in a month are below the MIF, UC is calculated as though you earned the MIF amount. This means your UC award is lower than it would be for an employed person earning the same low actual income. *Example:* You earn £800 profit in a month. The MIF is £1,927/month. UC treats your income as £1,927, so your UC award is reduced as if you had earned £1,127 more than you actually did. **The 12-month startup period** If you are newly self-employed, the MIF does not apply for the first **12 months** from starting your business. During this period UC is calculated on your actual self-employed earnings, giving you time to build your business. **When the MIF does not apply** - During the 12-month startup period - If you are a carer, have a disability, or have caring responsibilities that limit your hours - During periods of illness - If you are in the no work-related requirements group **Planning point** Self-employed people earning below the MIF may be better off moving to employment or taking on additional employed work alongside their self-employment. The MIF can make UC significantly less valuable for struggling sole traders.
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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.