Rollout of universal credit delayed again until December 2023

The £1,000 increase in the level of the UC Work Allowance will cost the Treasury £545m next year, rising to £1.7bn a year from 2023/24, when the new welfare system is finally implemented.

The government is also extending to all gainfully self-employed people the 12-month grace period before the so-called Minimum Income Floor applies, giving them more time to grow their businesses.

And from October 2019, the maximum rate at which deductions can be taken from UC awards will be reduced from 40% to 30% to allow claimants to repay debts at a sustainable rate.

The delay in the rollout of UC will save the Treasury a total of more than £2 billion over the six-year period until the completion of the process.

When the shift to UC was first announced by the scheme’s architect Iain Duncan Smith in 2010, it was intended to be fully rolled out by 2017.

However, the date has repeatedly been pushed back, with the Department for Work and Pensions stressing its intention to introduce the biggest benefit reform since the creation of the welfare state slowly and gradually, learning lessons from experiences gained during the process.

The chief executive of the Child Poverty Action Group, Alison Garnham, said: “The work allowance increase is unequivocally good news for families receiving UC, but a bigger salvage operation is still needed for the benefit.”