Key dates when State Pension, Universal Credit, PIP and other benefits will go up

During the October Budget, Chancellor Rachel Reeves confirmed the payment increases for DWP and HMRC benefits including the State Pension, Universal Credit and Personal Independence Payment (PIP). New rates will also be applied to Child Benefit, Carer's Allowance, Jobseeker's Allowance, and Employment and Support Allowance (ESA).

The only benefits that won't get an increase are tax credits. This is because they'll be scrapped by the end of this financial year, when all existing claimants are expected to have been transferred to Universal Credit instead. In addition, the Local Housing Allowance, which decides how much people on Universal Credit or Housing Benefit get towards their rent, will stay at the same level.

Ms Reeves says most benefits will rise in line with the September inflation figure of 1.7 per cent. A typical low-income family is expected to see an extra £253 in their Universal Credit payments next year as a result. As the rise will be minimal, campaigners had hoped for the October inflation measure of 2.2 per cent to be used instead.

Over a million Universal Credit 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 new Fair Repayment Rate 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.

READ MORE:

• Millions to see Universal Credit payments rise to £1,200 a month in Budget boost

• Labour confirms major DWP benefit changes for thousands of ESA claimants

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 new uprating of the State Pension.

When will the new benefit pay increases come into effect?

Housing Benefit and Council Tax Support rates normally change in line with the new council tax year, which begins on April 1.

Most benefit uprating runs from one financial year to the next. The current 2024/2025 financial year started on April 6, 2024, and will finish on April 5, 2025.

Tax credits rise from the start of the financial year, or tax year, which is always April 6. However, there won't be any increase next year because these benefits won't exist when the tax credits system is closed down.

For all other benefits from DWP or HMRC, the increase applies from the start of the first working week after the new financial year. In 2025, that will be Monday, April 7.

You'll need a full payment cycle after that date before seeing the increase in the amount you receive. That will mean those on benefits paid every week or two weeks will see the rise sometime in April, while those on benefits paid four-weekly or monthly won't see the rise until their May or June payments.

Which benefits are getting a 1.7 per cent rise?

The 1.7 per cent inflation-based rise applies to all working-age means-tested benefits including Universal Credit, Employment and Support Allowance (ESA) and Jobseeker's Allowance (JSA). It is also the amount by which disability benefits will rise, including Personal Independence Payment (PIP), Disability Living Allowance (DLA) and Attendance Allowance.

Carer's Allowance will also see a 1.7 per cent increase, as will the Savings Credit element of Pension Credit. Benefits administered by HMRC, namely Child Benefit and Guardian's Allowance, will also go up by the same amount.

Which benefits are getting a 4.1 per cent rise?

A 4.1 per cent earnings-based rise will be applied to the Basic State Pension, New State Pension and Pension Credit Guarantee Credit. Also going up by the same rate are Widow's Pension and Widower's Pension, both part of the Industrial Death Benefit claims system.

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