Chancellor Jeremy Hunt has announced that State Pension, Pension Credit and benefits will be uprated in line with inflation next year. Delivering his Autumn Statement to the House of Commons on Thursday, Mr Hunt confirmed an increase of 10.1% from next April at a cost of £11 billion for the UK Government.
By honouring the State Pension Triple Lock guarantee it means those on the full New State Pension will see payments increase from £185.15 per week to £203.85 and Basic State Pension weekly payments rise from £141.85 per week to £156.20.
Commenting on the State Pension uprating, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, sLid: “After weeks of speculation about whether the Triple lock would return next year many pensioners will be viewing today’s news with a sigh of relief. The decision to uprate Pension Credit by 10.1% comes as a welcome surprise and will boost the income of single pensioners to around £201 - they will also be in line for cost of living payments of £900.”
Ms Morrissey continued: “Pension Credit can make an enormous difference and acts as a valuable gateway to other benefits, however, not enough people are claiming it and more needs to be done to make sure that those who need it get it.”
However, she warned: “It’s also worth saying that this increase will only come into effect from April so there is a tough winter ahead and the Chancellor has been forthright in saying that times will be difficult for everyone.
“The reinstatement of the Triple Lock after its suspension last year will cool some of the discussion around its long-term viability for a while, but with a review of State Pension age due to be published soon, now is the time to carry out a comprehensive review of the State Pension to ensure it best helps those who need it most, both now and into the future.”
The Chancellor told the Commons that increasing benefits in line with 10.1% inflation means 10 million working-age families will see a “much-needed increase next year”.
He continued: “On average, a family on Universal Credit will benefit next year by around £600. And to increase the number of households who can benefit from this decision I will also increase the benefit cap with inflation next year.”
This means the benefit cap will rise from £23,000 to £25,323 for families in Greater London and from £20,000 to £22,020 for families nationally.
Lower caps for single households without children will rise from £15,410 to £16,967 in Greater London and from £13,400 to £14,753 nationally.
Commenting on the increase to Pension Credit, Mr Hunt said: “To support the poorest pensioners, I have decided to increase the Pension Credit by 10.1% which is worth up to £1,470 for a couple and £960 for a single pensioner in our most vulnerable households.
“But the cost of living crisis is harming all pensioners so because we have taken difficult decisions elsewhere in this statement, I can today announce that we will fulfil our pledge to the country to protect the pensions Triple Lock.”
Cost of Living Payments 2023
The Chancellor also announced further support for next year designed to target the most vulnerable households.
This cost of living support is worth £26 billion in 2023-24, in addition to benefits uprating, which is worth £11 billion to working age households and people with disabilities.
The new payments include:
- £900 for people on working age on means-tested benefits
- £300 - for pensioner households
- £150 for people receiving disability benefits
Ongoing Energy Price Guarantee
The Chancellor also announced that the Energy Price Guarantee will increase from £2,500 to £3,000 from Apirl and be in place for 12 months.
He said this will save around £14 billion next year while still saving the typical household £500 a year off their energy bills, compared to the price of the energy price cap.
The UK Government will also double to £200 the level of support for households that use alternative fuels, such as heating oil, LPG, coal or biomass, to heat their homes.
National Living Wage rise
The Chancellor also announced that from April 1, 2023 the National Living Wage (NLW) will increase by 9.7% to £10.42 an hour for workers aged 23 and over - the largest ever cash increase for the NLW.
This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over 2 million low paid workers.
Young people and apprentices on the National Minimum Wage (NMW) rates will also see a boost to their wages.
New National Minimum Wage rates
Rates will be increased for people aged:
- 21-22 by 10.9% to £10.18 an hour
- 18-20 by 9.7% to £7.49 an hour
- 16-17 year olds by 9.7% to £5.28 an hour
- Apprentices by 9.7% to £5.28 an hour
To keep up to date with the latest benefits news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out four times each week - sign up here.
READ NEXT
- New Pension Credit claimants who get an award for at least 1p will qualify for extra £324 payment
People of State Pension age to get £300 on top of Winter Fuel Payment from next month
Older people making new claim for Pension Credit could get decision before Christmas
State Pension petition calling for £380 per week could now be debated in Parliament
