The latest update on inflation was released today, affecting numerous households receiving benefits and the state pension. September’s inflation rate, which remains at 3.8%, is crucial in determining the upcoming benefit increases starting from April.
Recipients of benefits such as Universal Credit and state pension are likely to see larger increments than the current inflation rate. The government annually reviews benefit levels to ensure they keep pace with rising general prices, with September’s inflation figure being a significant factor in this assessment.
In April of this year, benefits like Universal Credit, Personal Independence Payment, and others rose by 1.7%, reflecting the inflation rate of 3.5% in September 2024. However, the upcoming April is expected to witness a lower inflation rate compared to the current figure.
Confirmation from the Department for Work and Pensions (DWP) is awaited to determine the exact benefit adjustments, which will vary depending on the specific benefits received. Typically, benefits are set to increase by 3.8% next April following the September inflation rate.
Nine benefits, including Universal Credit, are mandated by law to increase in alignment with inflation each April. Notably, the standard allowance within Universal Credit will rise by the September inflation rate plus an additional 2.3%, resulting in higher weekly payments for singles and couples.
For the state pension, adjustments are made in accordance with the ‘triple lock pledge,’ ensuring that it increases by the highest measure among inflation, average earnings growth, or 2.5%. Based on current projections, the state pension is anticipated to rise to £241 per week in April 2026.
Experts express mixed opinions on the benefit adjustments, acknowledging the step forward but highlighting ongoing financial challenges faced by many households. Organizations like the Resolution Foundation and the Office for Budget Responsibility provide insights into the impact of inflation on benefits and welfare spending expectations for the upcoming year.
