As the festive season approaches, thousands of families relying on government support are facing financial strain due to the Department for Work and Pensions (DWP) benefit cap. Currently, 119,000 households have their Universal Credit payments limited, while an additional 340 households on Housing Benefit are also affected by the cap.
The latest data from the DWP reveals that while the overall number of capped households has remained stable compared to May 2025, a concerning 82% of these families include children. This means many parents may be struggling to afford essentials and enjoy the holiday spirit this Christmas.
Among working-age Universal Credit claimants, 1.7% are impacted by the cap, a slight decrease from 1.8% in May 2025. On average, affected households see a monthly reduction of £249, down slightly from £256 earlier in the year. Between May and July 2025 alone, 23,000 new households became capped, while 40,000 exited the cap.
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The benefit cap, introduced in April 2013, limits the total amount of state benefits a working-age household can receive. Initially applied to Housing Benefit claimants, it was extended to Universal Credit recipients in April 2016. Although most capped claims now fall under Universal Credit, a minority of working-age households on Housing Benefit continue to be affected.
Public awareness of Universal Credit entitlements remains limited. A recent study found that 44% of respondents correctly estimated that an out-of-work single parent with two young children renting privately would receive less than £2,000 per month. Meanwhile, only 35% knew that the health-related Universal Credit element for claimants with limited capacity provides less than £500 monthly to cover extra costs.
With many families already facing financial challenges, the benefit cap’s impact during the holiday season raises concerns about support and wellbeing for vulnerable households across the country.