Universal Credit deductions why your payment is lower than you expected

Many people on Universal Credit are surprised when the money that arrives in their bank is lower than the amount on their online statement. In most cases the difference is because of deductions that are taken off to repay debts and arrears.

This guide explains in plain English how Universal Credit deductions work, the new 15 percent limit, what types of debt can and cannot be taken, and what to do if you think too much is coming out.

What are Universal Credit deductions

A Universal Credit payment is built up in stages:

• you start with a standard allowance (the basic amount for a single person or a couple)
• extra elements are added for things like children, housing costs and disability
• money may then be taken off for debts and arrears before the final amount is paid to you

Those amounts taken off are called deductions.

The main types are:

• repayments of advances and other Department for Work and Pensions debts
• recovery of overpayments of Universal Credit or older benefits
• third party deductions for important debts like rent arrears, gas and electricity arrears or court fines
• some other deductions such as child maintenance in certain situations

GOV.UK has a dedicated page that explains how money can be taken off Universal Credit to repay debts and what types of debt can be included. See: https://www.gov.uk/guidance/find-out-about-money-taken-off-your-universal-credit-payment

The new 15 percent maximum for most deductions

From 30 April 2025 the government introduced what it calls the Fair Repayment Rate. The key change is that:

• the total amount that can normally be taken from your Universal Credit to repay debts has been reduced from 25 percent to 15 percent of your standard allowance

This change is confirmed on GOV.UK, which states that the most that can normally be taken from your Universal Credit payment to repay a debt is now 15 percent of your Universal Credit standard allowance, and on updated guidance from Shelter.

Sources you can check:

• GOV.UK guidance on money taken from Universal Credit
• Shelter England Universal Credit deductions page: https://england.shelter.org.uk/housing_advice/benefits/universal_credit_deductions

Shelter explains it in simple terms:

• from 30 April 2025 the general limit for all debt deductions is 15 percent of your standard allowance
• the limit applies to most debt deductions, although there are a small number of exceptions

Your standard allowance is the basic Universal Credit amount for your household, before any extra elements for housing, children or disability are added.

Some special deductions, sometimes called last resort deductions, can go above 15 percent. Guidance from GOV.UK and the Social Security Advisory Committee explains that this can include certain child maintenance deductions and some cases where deductions are needed to protect your essential bills, for example serious rent or fuel arrears.

Examples of how the 15 percent cap works

Here is a simplified example just to show the idea.

Imagine a single person over 25 with no children, renting, whose standard allowance is roughly seven hundred sixty pounds a month. Fifteen percent of that standard allowance is about one hundred fourteen pounds.

Under the Fair Repayment Rate rules, in most situations the total of their debt deductions should not be more than that 15 percent figure. Their housing element, child elements and other extras are not used for calculating the limit, although deductions can still be taken from the total award.

The exact figures will depend on your personal standard allowance and which category your deductions fall into. If you are not sure, a debt adviser or benefits adviser can help you calculate it.

Which debts can come out of Universal Credit

According to GOV.UK, Shelter, Citizens Advice and Turn2us, deductions can be made for a range of debts, including:

Debts to the Department for Work and Pensions

• Universal Credit advance payments
• Budgeting advances
• overpayments of Universal Credit and some legacy benefits
• some civil penalties and fraud related penalties

Turn2us explains that if you are on Universal Credit with no earnings, the maximum that can be taken for overpayments and similar DWP debts is now usually 15 percent of your standard allowance. See: https://www.turn2us.org.uk/get-support/information-for-your-situation/overpayments-under-the-universal-credit-system/how-is-an-overpayment-recovered

Some essential third party debts

DWP can also take money from Universal Credit and send it directly to certain creditors to help you avoid more serious problems. Shelter and Citizens Advice list common examples:

• rent arrears and some service charges
• gas and electricity arrears with your current supplier
• water arrears in some cases
• magistrates court fines
• some child maintenance deductions

These are often called third party deductions because the money is going to someone other than DWP.

Debts that cannot be taken from Universal Credit

Shelter and the official guidance are clear that some debts cannot be taken directly from your Universal Credit payment. These include:

• credit cards
• bank overdrafts
• payday loans
• most other unsecured commercial credit

You still owe these debts, but the creditors have to use other methods to collect, such as asking you to pay directly or, in some cases, taking court action. They do not have an automatic right to deductions from Universal Credit.

How common are deductions and how much is taken on average

DWP publishes regular statistics on Universal Credit deductions. A bulletin covering March 2024 to February 2025 shows that:

• the average total deduction for households receiving Universal Credit rose from about sixty four pounds per month in March 2024 to about sixty eight pounds per month in February 2025
• in February 2025, the average monthly amount taken was around fifty nine pounds for government deductions, forty one pounds for advance repayments and thirty seven pounds for third party deductions

Source: Universal Credit deductions statistics March 2024 to February 2025 on GOV.UK. See: https://www.gov.uk/government/statistics/universal-credit-statistics-29-april-2013-to-10-april-2025

Citizens Advice research and blog posts have highlighted that many people with deductions struggle to pay for essentials such as food, heating and toiletries. Their October 2025 analysis notes that deductions, even at the lower 15 percent level, can still push some households into hardship if other costs are high.

Why your payment may be lower than the amount on your statement

When you look at your Universal Credit statement online, you will usually see:

1. your standard allowance
2. any extra elements (for example housing or children)
3. a list of deductions that are being taken off
4. the final payment amount that will be paid into your bank

Common reasons your payment is lower than you expect include:

• you are repaying a new advance after a recent claim or change
• DWP has started recovering an overpayment from previous months or from an earlier benefit
• there is a third party deduction for rent, gas, electricity or a court fine
• there is a benefit cap reduction if your total benefits are above the cap

The first thing to do is to log into your Universal Credit account and look carefully at the deductions section on your latest statement. Each deduction should show a description and an amount.

If something does not make sense, you can send a message in your Universal Credit journal asking for a breakdown and an explanation of how the deductions have been worked out.

Can you ask for deductions to be reduced or paused

In many cases, yes.

Debt charities and advice organisations say you should contact Universal Credit through your online journal or by phone if deductions are leaving you without enough money for essentials.

Depending on the type of deduction, DWP may be able to:

• reduce the amount taken each month
• spread repayments over a longer period
• temporarily pause some deductions in exceptional hardship

For example:

• Turn2us explains that the rate for recovering overpayments can sometimes be reduced if it is causing hardship
• Citizens Advice says you can ask for some third party deductions, such as water or fuel arrears, to be lowered if too much is being taken and you have a realistic repayment plan

However, some deductions, such as certain fraud penalties, may be harder to change. A specialist adviser can tell you what is realistic in your situation.

What if you did not know about a deduction or you think it is wrong

If you did not know money would be taken, or you think the amount or the decision is wrong, there are several steps you can take.

1. Ask for more information

Use your online journal or call Universal Credit to ask:

• what the deduction is for
• how much is owed in total
• how the monthly amount has been calculated

2. Check whether the debt is correct

Sometimes overpayments happen because of DWP error or missing information. If you believe an overpayment is not your fault, or the amount is wrong, you can challenge it.

GOV.UK and Citizens Advice explain that you can usually ask for a mandatory reconsideration of the decision that says there is an overpayment. This is the first step in the appeal process.

3. Get advice before you agree to anything new

If you are not sure whether a deduction is correct, speak to a free benefits or debt adviser before you agree to any new repayment plan or make extra payments. This is especially important if you are also behind with rent, council tax or energy bills.

How deductions interact with rent and other priority bills

Citizens Advice and Shelter treat Universal Credit deductions as part of your overall debt picture.

Key points:

• deductions for rent arrears and fuel arrears are designed to help you keep your home and your energy supply, but they also reduce what is left for food and other costs
• if deductions are too high, you may start falling behind on other priority bills such as council tax or current rent

Citizens Advice has a separate guide on help with debt and rent arrears when you are on Universal Credit, including information on Alternative Payment Arrangements, where the housing part of your Universal Credit can be paid directly to your landlord in some situations. See: https://www.citizensadvice.org.uk/benefits/universal-credit/on-universal-credit/universal-credit-debt-rent-arrears/

If you are juggling several priority debts and deductions, this is exactly the point where professional advice is most useful.

Where to get free help if deductions are leaving you short

You do not have to work all of this out on your own. Reliable, free help includes:

• Citizens Advice
  Help with Universal Credit, deductions and debt prioritisation.
  https://www.citizensadvice.org.uk

• National Debtline
  Free debt advice for England, Wales and Scotland, including factsheets on Universal Credit and government debts.
  https://www.nationaldebtline.org

• StepChange Debt Charity
  Support with budgeting, dealing with arrears and setting up affordable repayment plans.
  https://www.stepchange.org

• MoneyHelper
  Government backed guidance on benefits, budgeting and dealing with the cost of living.
  https://www.moneyhelper.org.uk

• Turn2us
  Benefits calculator and information on overpayments and deductions.
  https://www.turn2us.org.uk

These organisations can help you check whether your deductions are within the rules, see if the underlying debt can be challenged, and work out a budget that covers rent, council tax, energy and food first.

Key points to remember

• Universal Credit deductions are amounts taken off your award to repay debts and arrears before your payment reaches your bank.
• From 30 April 2025, in most cases the total of these deductions is capped at 15 percent of your standard allowance, although a small number of special deductions can go higher.
• Deductions can be made for things like advances, overpayments, rent arrears, fuel arrears and fines, but not for credit cards, bank overdrafts or payday loans.
• If your payment is lower than you expected, check the deductions section of your online statement and ask Universal Credit to explain anything that you do not understand.
• You can often ask for deductions to be reduced or rescheduled if they are causing hardship, especially where they relate to overpayments and some third party debts.
• Free, independent advice is available and can make a big difference if deductions are leaving you unable to cover essentials.