What is the Universal Credit taper?

It is the rate Universal Credit is reduced as your earnings rise (after any work allowance). The taper is commonly described as 55p off UC for every £1 of earnings counted.

Does the taper apply from the first £1?

Not always. If you qualify for a work allowance, you can earn some amount before the taper starts. If you do not, the taper can apply straight away depending on your circumstances.

Why can extra hours feel pointless?

Because UC can drop as earnings rise, and childcare/travel can eat the rest. The result is sometimes only a small net gain for a lot more time.

Universal Credit taper (55%) explained — with simple examples (UK)

What the 55% taper means

After any work allowance is applied, Universal Credit is reduced by 55p for every £1 of earnings counted. So if your earnings increase by £100 (after the allowance), your UC may drop by about £55.

Work allowance (the bit people miss)

If you qualify for a work allowance, you can earn a set amount before the taper starts. If you do not qualify, the taper can apply from the first £1 (depending on your circumstances).

The easiest way to avoid guessing is to run the full UC calculator with your details.

A simple example

Imagine your earnings (after any allowance) go up by £400/month. With a 55% taper, your UC could drop by about £220/month.

If childcare or travel increases by another £150/month, your “real” improvement might be only £30/month. That’s why people feel like they are working for nothing.

What to do with this

Estimate your UC properly using the UC calculator.
Use is it worth working? to compare work vs not working.
Use childcare vs extra work for “one more day” decisions.
If it looks grim, use the break-even helper to see exactly what needs to change.

Common mistakes

Using a guessed UC figure, then trusting the result too much.
Forgetting childcare/travel costs when adding hours or a day.
Mixing weekly and monthly numbers (pick one and stick to it).