Chancellor Rachel Reeves confirms DWP benefits rise in line with September inflation rate

Millions of Brits are set to receive a pay rise next year, as Labour confirmed a benefit uplift in the Budget today. Chancellor Rachel Reeves announced that benefits including Universal Credit, Personal Independence Payment (PIP), and Pension Credit will increase in line with the Consumer Price Index (CPI) for September.

This means some benefits will see a 1.7% rise. The move was anticipated, as Reeves had previously stated in 2023 that September's inflation figure would be used to uprate benefits under a Labour government, in keeping with "tradition".

In an interview with the BBC, she said: "If you pick and choose from year to year which inflation number is the cheapest thing to do, then what you see is the gradual erosion of people's incomes."

There are nine benefits which the Department for Work and Pensions (DWP) is legally required to increase in line with inflation each April. Other benefits, including Universal Credit, normally rise as well, but these are subject to Parliamentary approval.

Universal Credit, the most widely claimed benefit from the Department for Work and Pensions (DWP), is currently received by over six million people in the UK. The standard allowance for single claimants under 25 stands at £311.68, while those over 25 receive £393.45, reports the Mirror.

With a 1.7% increase, these amounts will rise to £316.98 and £400.14 respectively. Joint claimants under 25 currently receive £489.23 per month, which will increase to £497.55 with the 1.7% rise.

For joint claimants over 25, the current monthly amount of £617.60 will rise to £628.10. State pension payments are also set to increase by approximately 4% next April due to the Triple Lock Promise.

This promise, first introduced by the Tories and now adopted by Labour, ensures state pension payments rise by the highest of the following: the Consumer Price Index (CPI) for September, average wage growth between May and July, or 2.5%. Earlier this month, it was confirmed that wage growth was at 4.1%, while inflation was at 1.7%.

This means state pensions will increase by 4% in April 2025, as confirmed in today's Budget. Those receiving the old state pension currently get £169.50 per week, which will rise to £176.28 from next April.

Those on the new state pension, currently receiving £221.20 per week, will see this increase to £230.05 next year.