Each year, the majority of Department for Work and Pensions (DWP) and HMRC welfare payments are uprated by the previous September level of inflation – although not all of them
Millions of Brits will see their benefit payments rise this year – although there are a few which won’t.
Each year, the majority of Department for Work and Pensions (DWP) and HMRC welfare payments are uprated by the previous September level of inflation. This was confirmed last October as being 1.7% – meaning payments will be rising by this amount from April.
Meanwhile, the state pension will increase by 4.1% under the triple lock promise. The triple lock guarantees the state pension rises each April by the highest out of inflation (using the previous September inflation figure), wages (average growth between May and July) or 2.5% – whichever is highest.
Nine benefits are legally required by the DWP to increase in line with inflation each April, while other payments, including Universal Credit, are subject to Parliamentary approval. This approval was given in last year’s Autumn Statement. The benefits that are legally required to increase with inflation are:
- 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
However, it’s important to be aware that some benefits will not rise in April, and we have listed them below.
Benefit cap
Introduced by the government in 2013, the benefit cap limits the total amount of benefits working households can receive – even if their full entitlement is higher. Universal Credit, along with other benefits like Child Benefit, Housing Benefit and Jobseekers Allowance, counts towards the cap. The current cap is:
- £486.98 per week (£2,110.25 per month or £25,323 per year) for couples and lone parents in Greater London
- £423.46 per week (£ 1,835 per month or £22,020 per year) for couples and lone parents outside Greater London
- £326.29 per week (£1,413.92 per month or £16,967 per year) for single adults in Greater London
- £283.71 per week (£1,229.42 per month or £14,753 per year) for single adults outside Greater London.
If you or your partner are receiving Universal Credit due to a disability or health condition that prevents you from working, or because you’re caring for someone with a disability, you won’t be affected by the benefit cap. The same applies if you’re claiming Working Tax Credit, even if you have a nil award, or if you’re over Pension Credit age.
The benefits included in within the benefits cap are the following:
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance (except when in the Support Group)
- Housing Benefit (except for households in Supported Exempt Accommodation)
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance
- Maternity Allowance
- Reduced Earnings Allowance
- Severe Disablement Allowance
- Universal Credit (except the Childcare Costs element)
- Widowed Parent’s Allowance, Widowed Mother’s Allowance, Widow’s Pension.
You can use the Turn2Us benefits calculator to check whether you’re affected by the benefit cap.
Bereavement Support Payment
Bereavement Support Payment aims to provide financial support to parents who have lost a partner. Previously the benefits were only available to bereaved parents who were married or in a civil partnership, but the law was changed in 2023. To qualify for these bereavement benefits, parents must be under the state pension age, have paid a certain amount of National Insurance contributions and be either pregnant or having a dependent child on the day their partner died.
The amount you can get will depend on your relationship with the person who died and when you make your claim. There are two rates for the Bereavement Support payment. The higher rate of Bereavement Support Payment is worth up to £3,500, plus £350 a month for 18 months for those eligible. The lower rate is worth up to £2,500 plus 18 months of £100 payments.
You usually need to make a claim within 21 months of your partner’s death. If it’s been over 21 months since your partner’s death, you may still be able to make a claim if their cause of death was only recently confirmed.
Capital limits
Before you are granted certain benefit payments, the DWP must assess how much “capital” you have. This includes things such as savings. Under current rules, if you have capital/savings over £16,000 as a single claimant or as a couple, you will not be entitled to Universal Credit.
The lower limit currently sits at £6,000, and if you have savings between £6,000 and £16,000, the DWP treats it as if it gives you a monthly income of £4.35 for each £250, or part of £250, regardless of whether it does or not. An example provided by the benefits charity Turn2Us says: “So if you have £6,300 in a savings account, £6,000 of it will be ignored and the other £300 will be treated as giving you a monthly income of £8.70.” These limits are remaining the same and will not be uprated in April.
Housing Benefit
Housing Benefit is money to help you with your housing costs if you are on a low income and it can help with rent and some service charges. You cannot get Housing Benefit to help with the costs of a mortgage or home loan. The housing support is currently being replaced by Universal Credit, but you are still able to make a new claim in one of the following situations:
- You are 66 or over
- You live with a partner and both you and your partner are 66 or over (if one partner is 66 or over and the other isn’t)
- You were homeless and have been placed in temporary accommodation by the council
- You are living in sheltered or supported accommodation
Local housing allowance is used to calculate housing benefit payments for tenants renting from private landlords in England, Scotland and Wales. Work and pensions secretary Liz Kendall confirmed in November that local housing allowance (LHA) rates would be frozen at current levels until 2026. So as these rates are not rising, neither will Housing Benefit for private tenants.
In April 2024, Local Housing Allowance levels were increased to reflect the cheapest 30% of local rents using rental figures from September 2023. Prior to that, it had been frozen for four years at September 2019 levels. Local Housing Allowance payment rates vary according to your local council, so you will need to check your local authority’s website to find out how much your Local Housing Allowance rate is.