DWP confirms double payment freeze affecting benefit claimants from next April

The Department for Work and Pensions has confirmed a double payment freeze that will affect millions of benefit claimants from next April. The Local Housing Allowance and Benefit Cap will both stay at their 2024/2025 levels.

Work and Pensions Secretary Liz Kendall says that although all DWP and HMRC benefits, including the State Pension, will go up next year, the LHA and Benefit Cap aren't being increased. The LHA determines how much people claiming Universal Credit or Housing Benefit receive towards their rent.

The benefit cap was introduced in 2013 and imposes a limit on the maximum amount of benefits a working-age household can receive. In April 2023 it was put up for the first time but did not increase for 2024/2025 and will not go up for 2025/2026 either.

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How does the Local Housing Allowance work?

If you rent privately, your eligible rent amount is either your Local Housing Allowance (LHA) rate or your actual rent, whichever is lower. The LHA rate is based on where you live and your household size - find out how many bedrooms you are eligible for. The amount you are paid in Housing Benefits depends on the lower figure of your 'eligible' rent or LHA rate, your household income, including benefits, pensions and savings (over £6,000), and your circumstances (for example, your age or whether you have a disability).

If you claim Universal Credit, a housing element is included in your payment and will cover some or all of your rent. For council and housing association tenants, the payment will be based on your actual rent and is more likely to cover the whole amount if you are not working.

For people renting from private landlords, the Universal Credit housing element is based on the Local Housing Allowance (LHA) for the area where you live. The Local Housing Allowance is decided by the DWP using information from the Valuation Office Agency and is based on an average of private rents being paid by tenants in your area with the same number of bedrooms that you have or need.

The LHA rates for your area can be found here if you search by postcode or local authority. Amounts are given per week so you'll need to divide by 7, multiply by 365 and then divide by 12 to work out the monthly equivalent you would get in your Universal Credit housing payment.

If the DWP housing payment in your Universal Credit does not cover all the rent, you can ask the council for a Discretionary Housing Payment to make up the difference. If it is only a small amount you need to find, you may be able to pay the rest yourself from your benefit payments.

How much is the benefit cap?

The current rates of the benefit cap - which will remain unchanged after April - are as follows:

Annual level of Benefit Cap (Greater London)

• Couples (with or without children) or single claimants with a child of qualifying age: £25,323

• Single adult households without children: £16,967

Annual level of Benefit Cap (Rest of Great Britain)

• Couples (with or without children) or single claimants with a child of qualifying age: £22,020

• Single adult households without children: £14,753

Monthly equivalent (Greater London)

• Couples (with or without children) or single claimants with a child of qualifying age: £2,110.25

• Single adult households without children: £1,413.92

Monthly equivalent (Rest of Great Britain)

• Couples (with or without children) or single claimants with a child of qualifying age: £1,835

• Single adult households without children: £1,229.42

Weekly equivalent (Greater London)

• Couples (with or without children) or single claimants with a child of qualifying age: £486.98

• Single adult households without children: £326.29

Weekly equivalent (Rest of Great Britain)

• Couples (with or without children) or single claimants with a child of qualifying age: £423.46

• Single adult households without children: £283.71

Full statement from Work and Pensions Secretary Liz Kendall

"I have concluded my statutory annual review of State Pension and benefit rates under the Social Security Administration Act 1992. The new rates will apply in the tax year 2025/26 and will mainly come into effect from 7 April 2025.

"I am pleased to announce that the basic and new State Pensions, and the standard minimum guarantee in Pension Credit, will be increased by 4.1%, in line with the increase in average weekly earnings in the year to May-July 2024. This demonstrates our commitment to supporting pensioners, protecting the triple lock, which benefits over 12 million pensioners. From April, the full yearly rate of the New State Pension will increase by over £470.

"Other State Pension and benefit rates covered by my statutory review will be increased by 1.7%, in line with the increase in the consumer prices index in the year to September 2024. This includes Universal Credit and other benefits and statutory payments linked to participation in the labour market; and Additional State Pension and Pension Credit elements other than the standard minimum guarantee. These increases will apply across Great Britain.

"In England and Wales, Personal Independence Payment and other benefits to help with additional needs arising from disability, and the rate of Carer's Allowance, will also increase by 1.7%. In Scotland, these are devolved matters. All of social security, including state pensions, is a transferred matter in Northern Ireland. I will place the full list of proposed State Pension and benefit rates for 2025/26 in the Libraries of both Houses in due course.

"Although not covered by my statutory review of State Pension and benefit rates, I can also inform the House that Local Housing Allowance rates for 2025/26 will be maintained at the 2024/25 levels, following their increase in April 2024; and that the Benefit Cap has not been reviewed for 2025/26 and will also be maintained at the 2024/25 levels."

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