DWP PAYMENT RISES FOR UNIVERSAL CREDIT, PIP, STATE PENSION CONFIRMED IN BUDGET

Chancellor Rachel Reeves has confirmed new increases for all DWP and HMRC social security payments in her first Budget. The statement for Britain's finances, announced on October 30, will see two different sets of increases coming in from April 2025, at the start of the next financial year.

Ms Reeves confirmed that most benefits - including Universal Credit, Personal Independence Payment and HMRC Child Benefit payments - will rise in line with the September inflation figure of 1.7 per cent. The low level of the Consumer Price Index (CPI) measure of inflation last month will see a relatively small rise in benefits next April, with campaigners having hoped that the October figure of 2.2 per cent could be used instead.

Forecasts say a typical low-income family is expected to see an extra £253 in their Universal Credit payments next year as a result, though using the October inflation measure would have added another £74 to this. However, over a million claimants will see a separate boost to the amount they receive as debt deductions are to be capped at a new level of 15 per cent rather than the existing 25 per cent.

This move will help 1.2 million families, including 700,000 with children and means some of the poorest households will be £420 better off as a result. Save the Children estimates single parents could receive up to £39 more of their Universal Credit entitlement each month. For two-parent families, this could be up to £62.

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A higher uprating will be given to the State Pension, which will be good news for those who have lost their Winter Fuel Payment. Labour's commitment to the triple lock used to determine State Pension increases will mean a rise of 4.1 per cent is implemented.

The triple lock guarantees pensions rise annually whichever of these three measures is highest: average annual earnings growth, including bonuses, from May to July; the Consumer Price Index measure of inflation in the year to September; or a default minimum of 2.5 per cent. The predominant factor was pay growth of 4.1 per cent, which will now be used for the April uprating of the State Pension.

It means those on the full New State Pension should see payments rise by £9.10 per week from £221.20 to £230.30, while people with full entitlement to the pre-2016 Basic State Pension are set for an increase in their weekly payments of £6.95, from £169.50 to £176.45. This will increase the annual amount of Basic State Pension from £8,814 to £9,175.40, a boost of £361.40. The maximum New State Pension will rise by £473.20 a year, pushing it from £11,502.40 to £11,975.60 through 2025/2026.

The same rise of 4.1 per cent will also be applied to the guarantee credit element of Pension Credit, an income top-up for older people that's now key to being eligible for the Winter Fuel Payment.

The Chancellor told the House of Commons: "This commitment means that while working-age benefits will be uprated in line with CPI at 1.7 per cent, the Basic and New State Pension will be uprated by 4.1 per cent in 2025-26. This means that over 12 million pensioners will gain up to £470 next year."

She added: "The Pension Credit standard minimum guarantee will also rise by 4.1 per cent from around £11,400 per year to around £11,850 for a single pensioner."

The increases come against a backdrop of plans to bring down the burgeoning welfare bill through upcoming reforms of disability benefits, a new crackdown on fraud and getting more people into work to reduce economic inactivity.

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2024-10-30T15:35:38Z