The welfare cap
Since 2014 the UK government has had a cap on welfare spending. Here we explain how the cap is set and assessed. We also look at how the cap has changed.

Benefits and tax credits that are linked to inflation rise by 1.7% in April 2020, marking the end of the four-year freeze that affected many such payments. Further increases have been made to Universal Credit, Working Tax Credit and Local Housing Allowance in response to the coronavirus outbreak. The triple lock delivers a 3.9% increase to the Basic and New State Pension.
Benefits Uprating 2020 (898 KB , PDF)
This note sets out the main benefit and tax credit rates for the 2020/21 financial year.
Indexation of benefits in line with the Consumer Prices Index (CPI) resumes for all inflation-linked benefits and tax credits this year, resulting in a 1.7% increase. This follows a four-year period (2015/16-2019/20) during which most working-age benefits (except for disability and carer’s benefits) were held at their 2015/16 cash value, and a three-year period before that (2013/14-2015/16) when increases were limited to 1% per annum.
In response to the coronavirus outbreak, the Government announced a further set of increases for 2020/21. Universal Credit standard allowances and the Working Tax Credit basic element were increased by £20 a week (just over £1,000 a year) and Local Housing Allowance rates were reset to the 30th percentile market rent in each area.
The Basic State Pension and New State Pension continue to be uprated in line with the triple lock that was introduced in 2012/13 – that is, by the highest of the increase in earnings, price inflation (as measured by the CPI) or 2.5%. For the purposes of the 2020/21 uprating, earnings growth (+3.9%) was the highest of these three benchmarks, meaning that:
Pension Credit Guarantee Credit is required to increase at least in line with earnings. In 2020/21 it will also rise by 3.9%.
Benefits Uprating 2020 (898 KB , PDF)
Since 2014 the UK government has had a cap on welfare spending. Here we explain how the cap is set and assessed. We also look at how the cap has changed.
The Pensions (Extension of Automatic Enrolment) (No. 2) Bill is scheduled to have report and third reading on 24 March 2023. This briefing discusses the background to the Bill and its progress through Parliament.
This briefing outlines the current system of pension tax relief and covers the main areas of debate about future reform.