Cost of living April 2026: changes to pensions, benefits, energy and more

April is a big month for your finances. This year, there is some welcome news as energy bills fall and many benefit payments go up.

While this spring drop is helpful, it may not last. Prices on the global energy market are rising again, and bills could go back up when the price cap is reviewed in July. This could unfortunately cancel out some of the savings we’re seeing this month. We’ve broken down exactly what’s changing today and what it means for your pocket.

There are some changes coming to Universal Credit (UC) from April 2026. 

The Government has announced plans to change how Universal Credit payments are structured. This includes increasing standard allowance, while reducing some additional payments linked to health conditions for new claimants. 

The main changes include: 

• The standard Universal Credit allowance is set to increase over the coming years, slightly above the rate of inflation. See the table below for the standard rate breakdown.
• The LCWRA element (extra money for people with limited capability for work and work-related activity) of Universal Credit will be lower for many new claimants from April 2026. Unless these new claimants are either found to be terminally ill with less than one year to live or the DWP say the claimant meets their ​‘severe conditions’ criteria, in which case they will get £429.80 a month LCWRA (as part of the overall Universal Credit) instead of the lower £217.26 a month LCWRA (as part of their overall Universal Credit).
• People who already receive the LCWRA element, and some people with severe or lifelong conditions, are expected to have protections in place so their payments aren’t reduced. 

If you receive Universal credit, the exact amount will depend on your circumstances and which elements you receive. Here is the standard rate breakdown:

The two-child limit on Universal Credit will be removed so that families can get Universal Credit child element for all their children, regardless of the size of their family. It’s estimated that this will lift around 450,000 children out of poverty.

From April, energy bills are expected to go down for many households after the energy price cap was reduced for 1 April- 30 June. 

The price cap, set by the energy regulator Ofgem, limits how much suppliers can charge for each unit of gas and electricity for people on standard variable tariffs. From April, this cap is dropping by 7%, which should mean lower bills for many households (on average £150). 

You don’t need to do anything to get this reduction. The change will be applied automatically by your energy supplier. 

How much you personally save will depend on: 

• How much energy you use
• The type of tariff you’re on 

If you’re on a standard variable tariff, the lower rates will apply to the energy you use from 1 April onwards. 

If you’re on a fixed tariff, suppliers have said the savings will still be passed on, usually by adjusting the unit rates. Your energy supplier should contact you to confirm any changes. 

If you’re on a prepayment metre, your energy supplier will automatically apply the savings to any energy used from 1 April. If you’re on a traditional pre-payment meter such as ones that use a key or card, you’ll benefit from the savings when you top up your key or card.

The New full rate State Pension will increase by 4.8% from April 2026, increasing the payments to £241.30 weekly (£12,547.60 annually).

If you’re not currently getting your State Pension but want to check how much you could get, when you can get it and how you could increase it, use the GOV State Pension forecast.

From April 2026, the National Living Wage and National Minimum Wage are increasing, meaning millions of workers will see a pay rise. 

The new Minimum Wage is: 

• £12.71 per hour for people aged 21 or over 
• £10.85 per hour for those aged 18–20
• £8 per hour for under 18s and apprentices

For some full-time workers on the National Living Wage, this could mean around £900 more per year. Workers aged 18–20 on the National Minimum Wage could see their annual pay increase by around £1,500.

Effective 1 April 2026, the cost of a TV licence will increase:

• Colour licence: increasing from £174.50 to £180.00.
• Black and white licence: increasing from £58.50 to £60.50.

Concessions remain in place, such as a 50% discount for people who are severely sight impaired (reducing a colour licence to £90.00). Those in specific care facilities and those over 75 on Pension Credit may also be eligible for additional support.

As well as Universal Credit inflation increases, other benefits have increased with inflation. See below for new payment amounts:

Child Benefit

• Eldest child now £27.05 per week 
• Other children now £17.90 week

PIP Daily Living

• £76.70 per week for the standard rate
• £114.60 per week for the enhanced rate

PIP Mobility

• £76.70 per week for the standard rate
• £80 per week for the enhanced rate

If you need guidance on how to make the most of these changes or to get financial help, there are tools are services available to help you get the right support: