The Social Security Administration Act 1992 places an annual statutory duty on the Secretary of State to review the rates of State Pensions and benefits after consideration of trends in price and earnings growth in the preceding year. I have now concluded this review for the tax year 2023/24.
I have decided that State Pension and benefit rates should increase in line with the Consumer Prices Index (CPI) for the year to September 2022. This means that they will increase by 10.1% from 10 April 2023.
I will deposit the full list of the new rates in the House libraries in due course, but I am pleased to announce here the increases to some of the largest benefits. The full rate of the new State Pension will increase from £185.15 to £203.85 a week. The basic State Pension will increase from £141.85 to £156.20 a week. The Standard Minimum Guarantee for a couple in Pension Credit will increase from £278.70 to £306.85 a week. The enhanced rate of the daily living component of Personal Independence Payment will increase from £92.40 to £101.75 a week. The Universal Credit standard allowance for a couple where one or both are over 25 will increase from £525.72 to £578.82 a month; the Limited Capability for Work and Work-Related Activity amount will increase from £354.28 to £390.06 a month; and the child element for those born on or after 6 April 2017 will increase from £244.58 to £269.58 a month.
This decision will increase expenditure on State Pensions and pensioner benefits by £13 billion in 2023/24 compared to no change in these rates for the same period. It will meet the Government’s manifesto commitment to apply the Triple Lock to the new and basic State Pensions. It will also extend CPI protection to those who rely on the Standard Minimum Guarantee in Pension Credit at a cost of £700 million above the statutory minimum requirement.
The decision will also increase expenditure on reserved non-pensioner benefits by £9 billion in 2023/24 compared to no change in these rates for the same period. This includes benefits for those with additional disability or care needs and increases to Universal Credit which provides essential support to people on the lowest incomes whilst they seek work, seek progression in work, or are unable to work.
In view of the exceptional situation that currently pertains with respect to fuel costs, I have also decided to freeze the standard fuel cost deductions in Housing Benefit, rather than increase them in line with the normal convention of the fuel element of CPI.
I can also confirm that the Local Housing Allowance rates for 2023/24 will be maintained in cash terms at the elevated rates agreed for 2020/21.
I have also completed my periodic statutory review of the levels of the benefit cap which, since 24 March 2022 and under Section 96A of the Welfare Reform Act 2012, I am obliged to undertake at least once every five years. I have concluded that each of the four benefit cap levels should be increased in line with CPI for the year to September 2022. This means that they will increase by 10.1% from April 2023. The annual benefit cap levels will therefore increase as follows:
- to £25,323 for couples and lone parents in London and £22,020 for the rest of Great Britain.
- to £16,967 for single people without children in London and £14,753 for therest of Great Britain.
Social security is a transferred matter in Northern Ireland.
This statement has also been made in the House of Lords