Martin Lewis has issued an urgent warning to anyone who receives Tax Credits and hasn't responded to DWP letters.

Confusingly, Tax Credits aren't really to do with your tax - they are payments to help with living costs, and were divided into Child Tax Credits and Working Tax Credits. 

Claimants have received urgent letters from the DWP as as Tax Credits will end on April 5, 2025, the first of a series of legacy benefit closures. 

But, as Martin Lewis explained on his TV show, claimants MUST apply to move to Universal Credit when they receive their migration notice letter.

This is vital for two reasons.

1. Payments will cease in April 2025

People will lose their benefits if they don't act now, and it will take time to start a new claim. 

2. You could get Transitional Protection Payments

This protection helps people who receive less under Universal Credit than their current benefits. For example, if someone receives £600 from Tax Credits but would only be entitled to £400 under Universal Credit, they can receive a £200 top-up to maintain their current level.

This can be worth thousands of pounds, so do not delay. 

Transitional protection sounds short-term, but it actually lasts until the amount you get in Universal Credit is more than the amount you used to get on your old benefits – for example, because Universal Credit amounts are increased in line with inflation each year, or you become eligible for more support.

It only continues while your circumstances stay the same - and can be lost due to a significant life change that causes your eligibility to be reassessed – for example, you reach State Pension age, start a higher paying job or move in with a partner.

What happens if I do nothing?

If you choose not to claim Universal Credit now, your existing benefits will still end. You can claim Universal Credit later, however normal Universal Credit eligibility rules will apply, for example you will not be entitled to transitional protection.

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But, thousands of those who received Tax Credits have still not registered for Universal Credit, and time is fast running out. 

Research carried out by Ipsos UK on behalf of the Department for Work and Pensions about the low take-up found that while 78 per cent of respondents claimed to know about Universal Credit, seven in 10 were unaware of transitional protection payments.

What is Managed Migration?

The move is part of the DWP's ongoing managed migration programme, which aims to move all claimants of legacy benefits to Universal Credit by March 2026.

These include

  • Child Tax Credits
  • Housing Benefit
  • Income-based Jobseeker's Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Working Tax Credits

There has been significant confusion about the transition process, with many recipients at risk of losing their transitional protection if they fail to respond within three months of receiving their notice.

The DWP plans to send migration notices to all legacy benefit claimants by the end of this year. The migration notice will detail the exact date one needs to make a claim.

Those needing assistance with their migration can contact the Universal Credit Migration Notice Helpline, open Monday to Friday, 8am to 6pm  on freephone 0800 169 0328.