The Autumn Budget 2025 introduced a series of welfare and family support measures aimed at low and middle-income households, parents, and pensioners, while also encouraging more young people into work. For families across Scotland and the wider UK, the key changes relate to minimum wage rates, Universal Credit and other benefits, the State Pension, Pension Credit, and a new Youth Jobs Guarantee.
Here is what is changing and when.
National Living Wage and minimum wage increases
Significant increases to the National Living Wage (NLW) and National Minimum Wage (NMW) were announced on 25 November 2025, the day before the Budget. From 1 April 2026, hourly rates will be:
- National Living Wage (age 21 and above):
- £12.71 per hour
- A 4.1% increase over 2025/26
- National Minimum Wage (18–20):
- £10.85 per hour
- An 8.5% increase
- National Minimum Wage (16–17):
- £8.00 per hour
- A 6.0% increase
- Apprentice rate (all ages):
- £8.00 per hour
- A 6.0% increase
For employers, these higher rates will need to be built into wage and pricing decisions. For employees, they should offer some additional help with rising living costs.
Universal Credit and other working-age benefits
Several changes were set out for Universal Credit (UC) and related benefits, which sit at the core of UK welfare and family support.
Two-child limit removed
The two-child limit for Universal Credit and Child Tax Credit will be removed. Larger families will no longer see their support capped purely because they have more than two children.
Surplus earnings threshold extended
The £2,500 surplus earnings threshold – which allows some fluctuation in income before UC is adjusted – will be extended for one year from 6 April 2026. This gives claimants and employers a little more stability where earnings vary month to month.
UC standard allowance increased
From April 2026, the standard allowance (the core UC payment all eligible households receive) will increase by over 6%. This uprating is intended to help Universal Credit keep pace, at least in part, with rising living costs.
Higher childcare support for UC claimants
For UC claimants receiving help with childcare, the maximum support will also rise:
- The maximum amount that can be reimbursed for childcare costs will increase by £736.06 for each additional child,
- This is above the current maximum cap for two children.
This change is particularly important for working parents with larger families, where childcare costs can be a major barrier to taking on more hours.
Other working-age benefits
From April 2026, other working-age benefits will be uprated in line with the September CPI inflation rate of 3.8%. This includes a range of income-related and disability benefits, helping them track inflation more closely.
State Pension and Pension Credit
Pensioners will also see higher incomes from April 2026:
- The basic and new State Pension will be uprated by 4.8%.
- This is worth up to an additional £575 a year in 2026/27, depending on individual entitlement.
- The Pension Credit standard minimum guarantee will also be uprated by 4.8% from April 2026.
In addition, the administration of Pension Credit and Housing Benefit will be brought together. This change is intended to streamline processes and make it easier for pensioners to access the support they are entitled to.
Youth Jobs Guarantee scheme
To support younger adults into work, the Budget confirmed a new Youth Jobs Guarantee. Under this scheme, the government will:
- Guarantee a six-month paid work placement for every eligible 18–21-year-old,
- Where the young person has been on Universal Credit and looking for work for 18 months.
These placements will:
- Cover 100% of employment costs for 25 hours a week at the relevant minimum wage, and
- Include additional wraparound support to build skills, confidence and employability.
The scheme is designed to reduce long-term youth unemployment and provide a foothold in the labour market.
Don’t overlook Universal Credit
The Budget summary also carries a practical reminder:
Don’t ignore UC. The income ceiling for Universal Credit now stretches well beyond £70,000 for some couples. UC – even of just 1p a month – can unlock other benefits, so it is important to check eligibility.
In other words, households that assume they earn too much for UC may still qualify, especially if they have children or high housing costs.
What these welfare and family support changes mean for you
Overall, the welfare and family support measures in the Autumn Budget 2025 mean:
- Low-paid workers, apprentices and younger staff will see higher wage rates from April 2026.
- Families on Universal Credit may receive more support, especially larger families and those with high childcare costs.
- Working-age claimants will see benefits uprated in line with inflation.
- Pensioners will receive higher State Pension and Pension Credit payments, with simpler administration.
- Young adults facing long-term unemployment will have access to a guaranteed work placement.
For a detailed breakdown of the Budget’s key components, you can view the full document here.