2025 benefits and state pension increases: what you need to know

Budget 2024 brings welcome news to millions in the UK, as benefits and the state pension will see rises in line with inflation and wage growth.

Here's a breakdown of the key points and what they mean to you.

What are the incremental benefits?

As part of the new Budget, many benefits administered by the Department for Work and Pensions (DWP) will increase.

Most benefits will increase with the Consumer Price Index (CPI) rate of 1.7% from April. Here are the main benefits involved:

• Universal Credit
• Personal Independence Payment (PIP)
• Disability Living Allowance
• Entrance Allowance
• Incapacity Benefit
• Severe Disability Allowance
• Industrial Injury Benefit
• Maintenance Allowance
• Supplementary State Pension
• Guardian Allowance

These adjustments are required by law to keep pace with inflation, helping recipients cope with the rising cost of living.

Universal credit: the most sought-after benefit in the UK

Universal Credit is the most commonly claimed benefit in the UK, supporting more than six million people. With this 1.7% increase, here's what the new rates look like:

• Individual applicants under the age of 25: The current monthly rate of £311.68 will rise to £316.98.
• Single applicants over 25 years of age: The current monthly rate of £393.45 will rise to £400.14.
• The co-appellants are both under 25 years of age: The current monthly rate of £489.23 will rise to £497.55.
• Joint plaintiffs over 25 years of age: The current monthly rate of £617.60 will rise to £628.10.

These increases may not be life-changing, but they are designed to keep pace with inflation and provide extra support for those who rely on Universal Credit.

A triple lock promise and the state pension is rising

The state pension will rise by 4% thanks to the Triple Lock Promise.

This policy ensures that the state pension increases by the highest of three figures: CPI, wage growth (measured from May to July), or by at least 2.5%.

In April 2025, a wage growth rate of 4.1% will increase the state pension rate. Here's what it means:

• Old government pension: Rising from £169.50 a week to £176.28.
• New state pension: Rising from £221.20 a week to £230.05.

This increase should give pensioners a tangible boost, helping them manage day-to-day expenses in the face of rising costs.

Why is this increase important?

Benefits and pension increases are important to many families across the UK.

Although 1.7% may sound small, it is a measure to support those who rely on these payments.

For pensioners, a 4% increase would provide more breathing room to cover day-to-day expenses.

This Budget has taken steps to adjust benefits and pensions in line with rising costs, providing more support where it is most needed.

Keep an eye on these changes, and if you receive any of these benefits, look for these increased rates on your April 2025 payments.