When will universal credit and PIP benefit payments increase?

Yahoo

02-04-2025

Benefits payments will receive a welcome boost on 6 April, as they increase at the start of the financial year.
Several benefit payments, including universal credit, will be increased to combat the rising cost of living and inflation.
Here's what you need to know about the increases, how much they are, and when they will be paid.
Housing benefit
Housing benefit is being replaced by universal credit, which will contain the housing element for renters with private landlords.
While the standard rate of universal credit is going up, housing benefit rates will be locked in at the current rate until 2026, according to government plans.
The Local Housing Allowance (LHA), which calculates housing benefit for private renters, has been frozen since 2020.
Research from the homelessness charity Crisis and the campaign group Health Equals indicated that just 2.5% of private rented homes were affordable for renters on housing benefit last year, The Guardian reported.
Council tax support
Some people are eligible for support and deductions from their council tax bill — including the single-person discount for those living alone.
Each threshold for support differs from council to council. Check your council's website for details.
Tax credits
All tax credits, including working tax credit and child tax credit, will permanently stop on 5 April 2025 as part of the transition to universal credit.
These tax credits will now be paid as part of the universal credit payment. Recipients will have received a migration notice and must apply for universal credit before the date specified on the notice to avoid any payment gaps.
Universal Credit
Universal credit will rise slightly in April by 1.7%, meaning that claimants will get a small boost to their monthly income.
The rate for a single person aged 25 or over will rise from £92 a week in 2025/26, and to £106 a week by 2029‑30.
For the basic, standard allowance of universal credit, that works out as follows:
Single under 25: £311.68 a month to £316.98 a month
Single 25 or over: £393.45 a month to £400.14 a month
Joint claimants both under 25: £489.23 a month to £497.55 a month
Joint claimants, one or both 25 or over: £617.60 a month to £628.10 a month
PIP
After concerns that PIP would be frozen for claimants in the next financial year, the government confirmed in March that PIP payments will also rise by 1.7%, matching September's inflation figure.
The standard daily living rate will rise from £72.65 to £73.90, and the enhanced rate from £108.55 to £110.40 per week.
For the mobility component, the standard rate will increase from £28.70 per week to £29.20 per week.
The upper mobility rate, the enhanced rate, will increase from £75.75 per week to £77.05 per week.
ESA
Like other working-age benefits, ESA will also rise by 1.7%.
A single person's weekly rate will rise from £218.15 to £227.10, and a couple's weekly rate will rise from £332.95 to £346.60.
State pension
Unlike other benefits, the state pension will increase by 4.1%.
This is in line with the triple lock guarantee, which means state pension increases by an amount equal to the highest among three different measures— inflation, the average wage increase and 2.5%.
For the full new state pension — for those reaching state pension age after April 2016 — the weekly rate will be £230.25, coming in at £11,973 annually.
This amounts to an increase of £472 a year.
For those reaching state pension age before April 2016, the new weekly rate is £176.45 a week, accounting for £9,175 a year — an increase of £363 a year.
However, concerns have been raised that those on the full new station pension will have to pay tax on it from April 2026 as it will pass the income tax threshold, which currently stands at £12,570.
Carer's Allowance
If you care for another person for at least 35 hours a week, you can claim carer's allowance.
This benefit is rising from £81.90 a week to £83.30.
For many benefits, the new rates will take effect from 7 April.
However, for some universal credit claimants, increased rates will take effect around June. This is because the new rate won't be paid until the first assessment period that begins on or after 7 April.
What's worth bearing in mind is that you don't need to do anything — your benefit payments will automatically increase.
The rise in benefits payments are linked to September's inflation figures — which some have argued is unfair.
Universal credit is normally increased every April in line with the previous September's consumer price index inflation rate.
The consumer price index measures change over time in the prices paid for a basket of goods and services, like food, clothing and housing.
In September, this rate dropped to 1.7%, below the Bank of England's target rate of 2% for the first time since April 2021.
While this might have been welcome news for shoppers hoping for a drop in food prices, it was bad news for benefits recipients.
Even if inflation rose the next month — in October, it reached 2.3% — the benefit increase would still be based on the September rate.
Currently, the latest inflation figures sit at 2.8%, down from 3% in January.
At the time of the announcement, the Joseph Rowntree Foundation warned that the increase would "barely touch the sides".
The charity's senior policy advisor Iain Porter told Yahoo News: 'The consequence of today's rate of inflation is that April's uprating will be worth just a few pounds to most people.
'The basic rate of universal credit is so insufficient it fails to protect families from hardship, and this increase will barely touch the sides.'