Benefits administered by the Department for Work and Pensions (DWP) are set to rise by a record amount next year.
As the cost of living crisis has continued to worsen, the value of DWP benefits dropped in real terms in 2022, with households across Scotland and the UK struggling to afford everyday expenses and bills.
As reported by the Daily Express, the value of most DWP benefits increased by just 3.1 per cent in April, in line with the inflation level in September 2021.
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Inflation has since soared, however, with the Bank of England predicting it to hit 13.3 per cent this October, this means that the increase to benefits next year will be substantial.
September's inflation figure has been predicted to be around 11 or 12 per cent, which is the figure that the DWP will use when setting benefit levels next April.
While the exact figure will not be released until the September consumer price inflation figure is published in October, it is expected to lead to a record rise in benefits next year.
Director at retirement specialist Just Group Stephen Lowe said: "The annual uprating mechanism is designed to ensure benefits maintain their spending power in the face of inflation.
“Sharply rising energy costs and the cost of living crisis will make this year’s annual review more important than usual.”
He stated that this will offer hope to the millions of households across the UK struggling financially, adding: “A double-digit rise in benefits would help to ease some of the pressure on a lot of people who are struggling for income right now.”
This rise will apply to disability benefits including Personal Independence Payment, Attendance Allowance, Disability Living Allowance, Carer’s Allowance, Incapacity Benefit and Severe Disablement Allowance.
It is likely that the consumer price growth figure for September will determine the value of next year's State Pension increase as well. Under the triple lock system, the State Pension increases each year by whatever is highest out of earnings, inflation or 2.5 per cent.
The DWP has confirmed that it will apply an increase to inflation-linked benefits in April 2023 such as PIP, Universal Credit, Housing Benefit and ESA. The rise will be confirmed in November.
At the moment, Universal Credit for single claimants over the age of 25 is worth £334.91 per month. If inflation increases to 12 per cent in September, and this dictates the increase, payments will go up by £40.19 per month to £375.10.
This equates to an annual increase of £482.28.
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