Universal Credit and other DWP benefits to rise from April 2023

Autumn Statement: Hunt announces rise in Universal Credit

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In the Autumn Statement, he confirmed the rise which is set to benifit families on Universal Credit by around £600.

Prime Minister Rishi Sunak has been under pressure to stick to the 2019 manifesto pledge he made as Chancellor under Boris Johnson’s Government and increase the state pension and benefits in line with inflation.

Raising the payments amid soaring inflation will cost a combined £11billion next year but would prevent a rebellion from some Conservative MPs and help millions of families who are struggling.

As soaring food and energy bill further squeeze people’s income, many will be delighted the Chancellor has announced that benefit rates will rise in line with the September inflation figure of 10.1 percent.

People on Universal Credit will see their payments increase by as much as £52 a month after the rise.

Around 5.8 million Universal Credit claimants are set to benefit from the rises. The amount claimants will be better off by next year will depend on individual circumstances.

At present, a single person over the age of 25 gets £334.91 per month under the standard allowance.

This will increase to £368.74 once benefits rise in line with inflation – an increase of more than £34.

Here’s how the standard allowance will increase for each eligible group:

  • Single and under 25 – from £265.31 to £292.11
  • Single and 25 or over – from £334.91 to £368.74
  • Living with partner and both under 25 – from £416.45 (for them both) to £458.51
  • Living with partner and either of one of them is 25 or over – from £525.72 (for them both) to £578.82.

People with disabilities and certain health conditions get additional payments, and you also get more if you have children.

The Bank of England is not expecting inflation to come down until the middle of next year, which means that when benefits rise in April 2023 it could be even higher.

The following nine benefits are also legally required to have their payments rise with the previous September’s rate of inflation each April:

  • Personal independence payment (PIP) 
  • Disability living allowance
  • Attendance allowance 
  • Incapacity benefit
  • Severe disablement allowance 
  • Industrial injuries benefit
  • Carer’s allowance Additional state pension
  • Guardian’s allowance

The state pension triple lock was also confirmed in today’s Autumn budget.

Inflation in the year to September hit 10.1 percent, and it is likely this measure will be used for any triple lock increase.

If implemented, it would take the full new state pension from £185.15 per week to £203.85 per week, although how much one gets depends on a person’s National Insurance record.

Some may get less than the full new state pension if they were contracted out before April 6, 2016.

A 10.1 percent increase would also see the full basic state pension rise from its current rate of £141.85 per week to a weekly sum of £156.20.

The triple lock sees the state pension increase each year by whichever is the highest of 2.5 percent, inflation or average earnings.

The Times reported that Mr Sunak was likely to stick to his pledge to increase benefits as part of a “fair and compassionate” approach to the budget.

But Mr Hunt warned the budget will “disappoint” people, with huge cuts to public spending, tax hikes and scaled-back support for energy bills expected.

The costs of essentials are soaring at higher rates, and low-income families typically spend a greater proportion on these items.

Heidi Karjalainen, a research economist at IFS, explained that increasing benefits in line with inflation would still leave their real value on course to be six percent below their pre-pandemic levels.

That’s equivalent to almost £500 per year for the average out-of-work claimant – and this assumes that benefit recipients will continue to receive equivalent support for rising energy bills as they do under the energy price guarantee.

She said: “This is a consequence of below-inflation increases in April this year, when benefit rates failed to keep pace with an accelerating rate of inflation.

“The situation for benefit recipients’ living standards next April could be even more difficult depending on the design of the energy support package in place from next April.”

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