The UK government is ending tax credits, and failing to act on a letter from the Department for Work and Pensions (DWP) could mean losing up to £3,935 in financial support.
Tax credits will officially stop on April 5, 2025, and claimants must move to Universal Credit to continue receiving payments.
If you receive a Migration Notice Letter, it is crucial to act fast. This article explains who is affected, how payments might change, and why delaying could put your benefits at risk.
Who Is Affected?
The government is phasing out tax credits and replacing them with Universal Credit. If you receive any of the following benefits, you must transition to Universal Credit before the deadline:
- Child Tax Credit
- Working Tax Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income Support
- Housing Benefit
- Income-related Employment and Support Allowance (ESA)
If you currently receive one or more of these benefits, you will receive a Migration Notice Letter from the DWP, explaining the steps you need to take.
How Will Your Payments Change?
Moving to Universal Credit may result in changes to your monthly payments. However, transitional protection is available to ensure that you do not lose money immediately.
For example:
| Current Tax Credit Payment | New Universal Credit Amount | Transitional Protection | Total New Payment |
|---|---|---|---|
| £327.91 per month | £227 per month | £100.91 per month | £327.91 per month |
- This protection ensures your total monthly income stays the same.
- However, it only applies if you move to Universal Credit before the deadline and your circumstances remain unchanged.
If you do not apply in time, you will lose access to tax credits, and transitional protection will not be available.
Why You Must Act Now
Ignoring your Migration Notice Letter could mean losing financial support and facing difficulties reapplying later.
Benefits of Moving to Universal Credit on Time
Exemption from the £16,000 savings rule – Normally, savings over £16,000 make you ineligible for Universal Credit. But if you move from tax credits before the deadline, this rule won’t apply for 12 months.
Guaranteed transitional protection – Ensures your income doesn’t drop immediately.
Avoid loss of benefits – Missing the deadline means your tax credits will stop, and you may not qualify for Universal Credit.
After 12 months, if you still have over £16,000 in savings, you will no longer be eligible for Universal Credit.
Special Rules for Mixed-Aged Couples
If you and your partner are of different ages (one below and one above the State Pension age), special rules apply.
Key Points for Mixed-Aged Couples
- You must follow the instructions in your Migration Notice Letter.
- If you miss the deadline, you will lose your tax credits and Housing Benefit.
- Even if you have over £16,000 in savings, you can still claim Universal Credit—but only if you apply on time.
If you receive a Migration Notice Letter, do not ignore it. The deadline to move to Universal Credit is April 5, 2025.
Failing to act means you could lose up to £3,935 in financial support. While Universal Credit offers transitional protection, this is only available if you apply before the deadline and your circumstances stay the same.
Check your mail regularly, follow the steps outlined in your letter, and ensure you secure your benefits before tax credits end.
