MILLIONS of people on benefits will get a pay rise next year after the government announced that rates will increase.

But the rise won't apply to all support, and there are three you need to know about.

Universal Credit and state pension payments are among the benefits that will rise by 3.1% from April, 2022- and you can see the full list here.

But the amount you can get on Universal Credit to cover childcare costs is staying the same.

The benefit cap is also not increasing and neither is the amount of savings you can have before claiming Universal Credit.

Here we explain what that means for you…

Benefit cap

There's a limit on the amount of benefits you can claim, depending on what the support is and where you live.

The benefit cap is currently set at £20,000 a year for families, or £23,000 if living in London.

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For individuals the limit is £13,400 a year or £15,410 for those located in the capital.

These amounts will stay the same next year.

Universal Credit counts towards the cap, along with other benefits like child benefit, housing benefit and jobseekers allowance.

There are some exemptions when the benefit cap does not apply, for example if you're entitled to working tax credits.

If your benefit payments are more than the cap then your Universal Credit or Housing Benefit is reduced.

As other benefit rates are increasing, then some people could reach this limit and see they amount they get capped for the first time.

Around 180,000 households are currently affected by the benefit cap, which can affect how much you get.

Thomas Cave, policy and public affairs manager at Turn2us, told The Sun: “The Benefits Cap limits the maximum amount of benefits you can receive. It mainly affects large families or people who have high housing costs.

"If you think you may be affected it’s worth using a benefits calculator to check, so you can plan your finances.

"You may not be impacted by the cap if someone in your household has a disability that prevents them from working or caring responsibilities for someone with a disability.”

Childcare costs you can claim back

If you're getting Universal Credit and are working, there's help available to cover the cost of childcare.

You can get 85% of the costs back, up to a certain amount, though you have to pay out first and claim the cash back later.

It's a rule that's been branded unfair, making it harder to get back into work.

The rates are currently:

• Up to £646.35 for one child
• Up to £1,108.04 for two or more children

You can get it up to August 31 following the child’s 16th birthday.

These amounts won't change next year – you'll still claim the same amount back for childcare costs, and won't be able to get more.

It's worth checking if there's other help you can get for childcare costs though, like tax-free childcare and free hours.

Savings and Universal Credit

If you have savings then it could affect the amount of Universal Credit you can get.

Right now, any savings under £6,000 are ignored.

And cash you have of between £6,000 and £16,000 counts towards your Universal Credit calculation.

It's treated as monthly income of £4.35 for every £250 over £6,000.

Any savings over £16,000 that you have yourself or as a couple means you won't be entitled to Universal Credit.

These amounts will stay the same next year, and won't rise like other rates and thresholds for benefits.

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