Benefits Uprating 2025/26

The Secretary of State for Work and Pensions is required to review the level of benefits and State Pensions each year. This briefing sets out the main benefit, pension and tax credit rates that have been announced for the 2025/26 financial year.

Inflation-linked benefits and tax credits will rise by 1.7% from April 2025, in line with the Consumer Prices Index (CPI) rate of inflation in September 2024.

The basic and new State Pensions will be uprated by 4.1% from April 2025, in line with the annual increase in the Average Weekly Earnings (AWE) index for May–July 2024.

Universal Credit allowances in 2025/26

Due to the increase in line with CPI, in 2025/26 Universal Credit standard allowances will increase:

• From £311.68 to £316.98 per month for single people aged under 25

• From £393.45 to £400.14 per month for single people aged 25 and over

• From £489.23 to £497.55 per month for joint claimants both aged under 25

• From £617.60 to £628.10 per month for joint claimants both aged 25 and over

Pension rates in 2025/26

The full rates for 2025/26 will be:

• £230.25 per week for the new State Pension (for those reaching State Pension age on or after 6 April 2016) – up from £221.20 in 2024/25.

• £176.45 per week for the basic State Pension (the core amount in the old State Pension system) – up from £169.50 in 2024/25.

The real value of benefits over time

Although their effect in any given year is usually not dramatic, uprating decisions and rules compound over time and have substantially changed the value of benefits, both in real terms and relative to earnings. A useful illustration of this is the change in the real value of the basic State Pension compated with basic levels of unemployment support.

Sources: Abstract of DWP benefit rate statistics 2023 and ONS RPI series CZBH

Rates for these two benefits tracked against one another from their introduction until the 1970s. After that, the rates diverged as pensions were increased by a greater amount with the introduction of earnings links in the 1970s, and the more recent triple lock. Whereas unemployment benefit rates have shown a decades-long downward trend.