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Yahoo
02-04-2025
- Business
- Yahoo
When will universal credit and PIP benefit payments increase?
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.'
The Guardian
01-04-2025
- Business
- The Guardian
Only 2.5% of private rentals in England affordable on housing benefit, study finds
Only 2.5% of private rented homes in England were affordable for people on housing benefit last year, with charities warning that more people will be pushed into rent arrears and homelessness as a freeze on the benefit takes effect. From Tuesday, housing benefit rates will be locked at current rates until 2026, affecting 5.7m households on low income which rely on it to cover rent. Research from the homelessness charity Crisis and the campaign group Health Equals found fewer than three in every 100 private rental properties listed in England were affordable for people on housing benefit between April and October 2024. This figure is down from 12% in 2021-22. Over the past decade, rents in the private sector have risen by 45% in England. Crisis said people on low incomes could be forced to sleep rough or pushed into poor quality temporary accommodation because of the growing gap between housing benefit and the cost of rent. Matt Downie, the charity's chief executive, said it was becoming an 'impossible situation' and that the freeze represented a real-terms cut. 'Housing benefit is supposed to cover the lowest third of rents in the private sector. We are currently nowhere near that,' he said. 'There is no doubt that today's freeze on housing benefit will lead to rising homelessness. It also risks completely overwhelming local authorities who are already struggling to cope with the demand for support, and will leave more people stuck in unfit temporary accommodation that damages their health and wellbeing.' The research found that, across Great Britain, 2.7% of private rented properties were affordable, and that households on housing benefit were being forced to find, on average, an additional £337 a month for a one-bed, £326 for a two-bed and £486 for a three-bed home. Downie urged the government to reverse the benefits freeze, saying it would 'undermine their efforts' to end homelessness and pile further pressure on local authorities, which spent £2.3bn a year on temporary accommodation for homeless families in 2023-24. In the 12 months to February 2025, average rent in England rose to £1,381. Meanwhile, 126,040 households in England are now in temporary accommodation, including more than 164,000 children – the highest levels on record. In the autumn budget, the chancellor, Rachel Reeves, announced that the local housing allowance (LHA) – the localised rates that determine how much housing benefit claimants are entitled to – would be locked at current levels until 2026. LHA rates have been frozen periodically since 2016 – former Conservative governments froze it for seven out of 12 years, before increasing rates last year. Crisis and Health Equals said rising rents were pushing more families into poor-quality homes, often beset with problems such as cold and damp, adding that the financial impact of poor housing was costing the NHS an estimated £1.4bn a year. Paul McDonald, the chief campaigns officer at Health Equals, said: 'When people are forced to move house, sofa surf, live in temporary accommodation or cold, mouldy and overcrowded conditions, their health and wellbeing suffers. In the UK thousands of lives are already being cut short by up to 16 years by factors like poor quality and unaffordable housing.' A government spokesperson said: 'We have inherited the worst housing crisis in living memory with rent levels unaffordable for far too many. 'We're building 1.5m homes to improve affordability for renters and helping those on the lowest incomes pay their housing costs by extending the household support fund and maintaining discretionary housing payments. Alongside this, we recently announced a £2bn investment for up to 18,000 new social and affordable homes, while our renters' rights bill will fundamentally reform the private rented sector by empowering tenants to tackle unreasonable rent hikes.'
