UK benefits and pensions: what’s changing?

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Pensions and most state benefits go up by 3.1% on 11 April – but bills are rising far faster, and inflation is predicted to top 8.4%

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Why are benefits and pensions changing today?

On 11 April all pensions and most state benefits will rise by 3.1%. The figure is based on the consumer prices index as calculated in September last year – just before prices for energy and other household costs started to rise.

What is changing?

The basic state pension will rise by £4.25 a week to £141.85 a week, while the full new state pension will go up £5.55 a week to £185.15. A single person aged 25 will see their universal credit allowance rise from £324.84 to £334.91 a month, or £4,019 a year. Child benefit rises 68p a week for the eldest child. All other benefits, including disability allowance, rise by the same percentage. The money is paid automatically and recipients do not need to act.

A rise is good news, right?

Unfortunately, bills are rising at a far faster rate, so most people receiving state benefits will have less money at the end of the month.

Since September, Ofgem, the energy regulator, has twice increased the fuel cap – the maximum energy suppliers can charge for gas and electricity. Average dual fuel bills are now just under £2,000 a year – an increase of almost £700 for an average household. A pensioner on the full state pension will see their pension rise by £288 for the year. Even after the government’s £150 council tax rebate and the £200 loan is applied to their account, they will still be £350 a year worse off. And that is before further predicted energy hikes in October – to £2,600 – or any food price or other increases are factored in.

Overall, inflation is predicted to rise to 8.4% or higher. Campaigners are already warning that some households are having to choose between heating and eating – a dilemma that a growing number will face over the next 12 months.

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