Martin Lewis' MoneySavingExpert.com website has issued a warning to 1.4million people claiming Tax Credits ahead of a major Universal Credit change.
The latest MSE newsletter urged those claiming Tax Credits to check if they'd be better off if they switch over to Universal Credit.
This is because the maximum amount that parents on Universal Credit can claim back monthly for their childcare costs will rise by nearly 50% this month.
However, those claiming the older legacy benefit will not be entitled to the extra cash support.
From June 28, the amount parents can claim back on childcare costs will rise to £951 for one child and £1,630 for two or more children.
This rise will give parents eligible a monthly £522 boost for childcare payments.
Those on Tax Credits get help with childcare costs through the childcare element of Working Tax Credit.
Currently, the maximum you can get for one child is around £530 a month and for two children or more it's around £910.
These amounts are significantly less than what people claiming Universal Credit will be getting from the end of June.
In the MSE newsletter, the team said Tax Credit claimants with children should check if they can switch to Universal Credit and then check if they can get childcare support.
The MSE newsletter said: "The Government estimates up to 1.4 million people (including some groups without children) would be better off switching from legacy benefits to Universal Credit (most will be switched regardless by the end of 2024, for a few it could be 2029 though)."
However, it warned people should "always" get one-to-one help with an approved charity like Turn2Us before applying to switch from legacy benefits to Universal Credit.
This is because some people actually may not end up being better off on Universal Credit - and once you have switched you can't go back.
The MSE newsletter recommends you make a quick check using a free benefits calculator where you will have to provide your current earnings and other support you get.
This will provide you with a simple snapshot of whether you will be better off switching - if it does show that you would be, then speak to a benefits specialist for more information before making the move.
Some issues claimants should be aware of include:
- Universal Credit is paid in one lump sum each month
- Universal Credit payments can be cut by 25% to cover debt repayments
- Universal Credit claimants are required to do 35 hours of job-related activities each week - Tax Credit claimants only need to do 30
The MSE newsletter added: "Most importantly, the best thing to do - even if all looks good - is to get free one-on-one help from a professional adviser to double-check first."
