Pensions and Social Security

Stephen Timms Excerpts

Tuesday 10th February 2026 Commons Chamber

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I beg to move,

That the draft Guaranteed Minimum Pensions Increase Order 2026, which was laid before this House on 12 January, be approved.

[Madam Deputy Speaker (Caroline Nokes)]

With this it will be convenient to discuss the following motion:

That the draft Social Security Benefits Up-rating Order 2026, which was laid before this House on 12 January, be approved.

[Sir Stephen Timms]

In my view, the provisions in the instruments are compatible with the European convention on human rights. The draft Social Security Benefits Up-rating Order will increase relevant state pension rates by 4.8%, in line with the growth in average earnings in the year to May to July 2025. It will increase most other benefit rates by 3.8%, in line with the rise in the consumer prices index in the year to September 2025, so the regular formula has been used.

The order commits the Government to increased expenditure of £9 billion in 2026-27, of which £6 billion will be from state pensions and pensioner benefits, £2 billion from disability and carers benefits, and £1 billion from other working-age benefits. A further £2 billion of expenditure on working-age benefits will be incurred in 2026 as a result of uprating decisions made under separate legal powers in the Universal Credit Act 2025, which will set new rates for universal credit and income-related employment and support allowance.

Let me say a little more about each of the benefits being uprated in turn. First, on pensions, the Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by the highest of the growth in earnings or prices or 2.5%. That means that the uprating will be by 4.8% for 2026-27. As a result, from April the basic state pension will increase from £176.45 per week to £184.90, and the full rate of the new state pension will increase from £230.25 at the moment to £241.30 per week.

[Sir Roger Gale (Herne Bay and Sandwich) (Con)]

I suppose I ought to declare an interest, Madam Deputy Speaker. [Laughter.]

The right hon. Gentleman will understand that we welcome the adherence to the triple lock that my party introduced. He will also know that there are tens of thousands of expatriate United Kingdom citizens whose pensions have been, and remain, frozen at the point at which they left the United Kingdom, in spite of the fact that they have paid their full taxes and national insurance contributions throughout their working lives in the UK. The last Government, to our shame, failed to address this issue. Do this Government have any plans to do so?

[Sir Stephen Timms]

I am grateful to the right hon. Gentleman for raising this point. It might be of some comfort to him to know that it was not only the last Government who failed to do anything about this, and that previous Governments also failed. Indeed, in my previous tenures of the office of Pensions Minister, this issue was raised with me. However, it was the case that when those people left the UK, the rules were then as they are today. They were quite clear when people left. Of course, it depends on which country they went to, but in the countries where uprating has not been applied, it has always been the case that uprating has not been applied there, so it should not have come as a surprise to those who left that their pensions were not uprated. We are not looking at any proposals to change the situation at the moment, but I know that the right hon. Gentleman has campaigned on this matter consistently over a long period and I pay tribute to him for that.

[Jim Shannon (Strangford) (DUP)]

We very much welcome the triple lock and the extra moneys coming to our pensioners, but an issue has come to my attention recently. I had an 84-year-old pensioner in my office just last week who said, “Jim, I’ve got a demand from the HMRC for hundreds of pounds, but I’ve never been in debt in all my life.” When it comes to those pensioners who now find themselves being taxed when they were never taxed before, is it not possible to have a different system where the money could be taxed at source, rather than asking pensioners who are financially, mentally and emotionally under pressure to fill in an online form, which they just cannot do? There must be a simpler way of doing it.

[Sir Stephen Timms]

The question of how the tax system operates is a matter for His Majesty’s Treasury rather than for me. However, the hon. Gentleman might take some comfort from the reassurance provided by the Chancellor that those whose only income is the basic or new state pension, without any increments, will not have to pay any income tax in the course of this Parliament. Of course, those who have additional income beyond the state pension often do have a tax liability. The mechanism for how that is applied is a matter for my hon. Friends in His Majesty’s Treasury rather than for me, but I can certainly ensure that his point is passed on to them.

Other components of state pension awards, such as those previously built up under earnings-related state pension schemes, including the additional state pension, will increase by 3.8%, in line with prices. The Government are committed to supporting pensioners on the lowest incomes, so the safety net provided by the pension credit standard minimum guarantee will increase by 4.8%. That means that it will increase from £227.10 to £238 per week for single pensioners, and from £346.60 to £363.25 per week for couples. The maximum amount of pension credit savings credit will increase by 3.8%, in line with prices.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

One of the first acts of this Government was to remove the winter fuel payment, before their subsequent partial U-turn. The Prime Minister himself promised assistance for WASPI women, which is manifestly not happening. Both things affect pensioners significantly. When it comes to uprating, the gap between new and old pensions is widening all the time, because although they are going up by the same percentage, they start from different baselines. What are the Government doing to equalise pension levels to prevent that situation from worsening?

--- Later in debate ---

[Sir Stephen Timms]

We are not proposing any change in those arrangements. As the hon. Gentleman will know, those arrangements were introduced by the previous Government. In fact, the coalition Government put in place the current arrangements for the new state pension, which were introduced with commitments to future uprating. We are committed to delivering the triple lock, but we are not planning to change the relativities between those two arrangements.

Most working-age benefits and other benefits for people below state pension age will also increase by 3.8%. They includes statutory payments such as statutory sick pay, statutory maternity pay, the personal allowances of income support, housing benefit, jobseeker’s allowance, and contributory employment and support allowance. The order will also increase by 3.8% the child amounts, the carer amounts, transitional severe disability premiums in universal credit, and pensioner and carer premiums in income-related employment and support allowance.

As I mentioned earlier, the Universal Credit Act 2025 included important changes to rebalance universal credit. For 2026-27, the standard allowance in universal credit will be uprated by September’s consumer prices index plus an additional 2.3%. That represents the first ever permanent above-inflation rise to the universal credit standard allowance, and I believe that it is the first permanent real-terms increase in the headline benefit rate since the 1970s. That is not part of the order that we are debating, but all these increases will apply across Great Britain.

[John Milne (Horsham) (LD)]

I very much appreciate the action that the Government have taken to uprate UC—for the first time in its history, as the Minister says—but does he accept that it still will not cover the cost of basic essentials such as food, heating and rent for many of our most put-upon constituents?

[Sir Stephen Timms]

I think perhaps the point that the hon. Gentleman is making is that it does not fulfil the aspirations of the essentials guarantee campaign, with which he and I are familiar, and that is true. However, April’s above-inflation uprating will be the first of four such upratings, so there will be a similar over-inflation uprating in each of the following three Aprils. It will not end up at the level on which the essentials guarantee campaign has focused, but let us see what happens beyond the period for which we have made these announcements. As he said, it is an historic change of direction for public policy.

Benefits for people in England and Wales who have additional costs as a result of disability or ill health will also increase by 3.8%. These include disability living allowance, attendance allowance and personal independence payment. The increase will also apply to carer’s allowance.

The draft Guaranteed Minimum Pensions Increase Order 2026 sets out the yearly amount by which the guaranteed minimum pension part of an individual’s contracted-out occupational pension, earned between 1988 and April 1997, must be increased when it is being paid. The increase is paid by occupational pension schemes, and helps to provide a measure of inflation protection for people in receipt of contracted-out occupational pensions earned between 1988 and 1997. The law requires that GMPs earned between those two dates must be increased by the percentage increase in the general level of prices measured the previous September, capped at 3%. The September 2025 inflation figure— or CPI—was 3.8%, so the increase for the financial year 2026-27 will be 3%.

The 3% cap provides pension schemes with more certainty, allowing them to forecast their future liabilities more reliably. That is important when they are considering their funding commitments. The measure strikes a balance between, on one hand, protecting members against the effects of inflation, and on the other, not increasing scheme costs beyond what schemes and sponsoring employers can reasonably afford.

The draft Social Security Benefits Uprating Order 2026 will, if Parliament approves it, commit the Government to increased expenditure of £9 billion in the next financial year. Changes will mainly come into effect from 6 April this year and apply for the tax year 2026-27. The order maintains the triple lock—which benefits pensioners in receipt of both the basic and new state pensions—raises the level of the safety net in pension credit beyond the increase in prices, increases the rates of benefit for those in the labour market, and increases the rates of carers benefits and benefits to help with additional costs arising from disability or health impairment.

The draft Guaranteed Minimum Pensions Increase Order requires formally contracted-out occupational pension schemes to pay an increase of 3% on GMPs in pensions earned between April 1988 and April 1997, giving a measure of protection against inflation, paid for by the scheme. I commend the orders to the House.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

--- Later in debate ---

[Sir Stephen Timms]

I am grateful for the opportunity to wind up this debate. I thank everyone who has taken part for their constructive and helpful contributions, and I want to make a number of points in response.

I am grateful to the hon. Member for South West Devon (Rebecca Smith) for clarifying what happened in 1997—she read my facial expression correctly. I was perplexed when she told us that child benefit had been abolished. I have done a little bit of checking since she made that clarification, and it was in 1999 that family credit was replaced with the much better and stronger tax credit system. I do not know whether her family decided not to apply for that, but the introduction of working tax credits and the wider tax credit system made big progress, particularly in reducing child poverty across the country.

The hon. Lady was absolutely right to draw attention to the scale of the challenge that the country faces in the number of young people not in education, employment or training, as nearly 1 million were left behind by the previous Conservative Government. We are energetically on the case now to address that problem, which should have been addressed long ago. It is encouraging that the proportion of young people out of education, employment or training has fallen over the last year, but we do not want anybody to be left behind.

We are investing £820 million in the youth guarantee over the next three years to ensure that every single young person can access the support that they need to earn or to learn. Nearly 900,000 young people will receive intensive one-to-one support, and we are expanding youth hubs to every area in the country, creating around 300,000 additional opportunities to gain valuable workplace experience and training. Additionally, the youth guarantee will guarantee jobs for some 55,000 young people aged 18 to 21. The hon. Lady is absolutely right that there is a great deal to be done on this issue, and we are finally doing it. I look forward to reporting back to the House on progress as it develops.

The hon. Lady referred to the Conservative party’s reputation for being “a safe pair of hands for the economy.” Well, following the Liz Truss debacle, that reputation has sadly been destroyed, and it will take a long time to rebuild. People have a long memory, and remember the awful turbulence that the country was plunged into during that period, and that alleged reputation is sadly long gone.

The hon. Lady made the point that families have a choice about whether they can afford another child. Of course, one of the points that emerged from our debate on the two-child limit was that most families on universal credit with more than two children were not on universal credit when they had them. That was not an issue in their minds when they made that choice, so the Conservative response in that debate did not reflect the realities of what families are facing.

The hon. Lady made an interesting point about passported benefits, and I have seen the publicity on what the think-tank Onward has said on this matter. It is understandable that service providers use an existing means test to target their provision. That is what the last Government did on the cost of living payment during the pandemic, for example. I notice that the head of Onward is a former Chief Secretary to the Treasury, so one would have thought that he would have had a chance to do something about this over his years in office, but it is an interesting topic. I think the arrangements we have for passported benefits make sense, but if there are proposals for alternative arrangements, we will be interested to look at them.

The hon. Lady was critical of the use of the relative poverty measure for assessing the number of children growing up in poverty, as was the hon. Member for Faversham and Mid Kent (Helen Whately) last week. The relative poverty measure is the international standard measure; it is widely respected, and is used for all international comparisons on this metric. I think the reason why the Conservative party has always been so reluctant to refer to relative poverty is that its performance on that measure in government—I am talking about the Government who left office in 2024, but Governments before that as well—has been so consistently dreadful. During the debate on the two-child limit Bill, the point was rightly made that an important part of David Cameron’s work to bring the Conservative party up to date was embracing relative poverty as a valuable measure that ought to be taken into account. We now seem to have moved back to the pre-Cameron era in the Conservative party, and it may take some time for the party to recognise the scale of the change in its thinking that is needed if it is to reflect the country’s current situation.

I was interested in what the hon. Member for South West Devon said about her constituent who is on PIP. I would very much like to see the letter that she referred to, because she is absolutely right that PIP is an in-work benefit as well as an out-of-work benefit, and I would be extremely concerned if people were being told, “You’re in work, so you can’t have PIP any more.” There are disincentives of that kind in the system that need to be addressed, so I would love to have a look at that letter. As the hon. Lady knows, I am co-chairing a review of PIP that will conclude by the autumn of this year; she said that she did not think that the review would happen until 2027, but it will conclude by the autumn of this year.

The hon. Lady is right that we need to increase the proportion of face-to-face assessments for benefits. Face-to-face assessments are such a small proportion of total assessments at the moment because of the contracts that the Conservative Government entered into towards the end of their term in office, which contained no requirements for an adequate number of face-to-face assessments. Indeed, the Conservative Government sold off most of the premises where those assessments were undertaken, so of course it is taking some time to build up again the capacity to deliver those assessments, but we are doing so. We are putting right the mistakes that the previous Government made, and we are seeing a steady increase in the proportion of both work capability assessments and PIP assessments that are undertaken face-to-face.

[Carla Lockhart (Upper Bann) (DUP)]

Accuracy and fairness are really important, so I think the face-to-face assessments are vital. There has been talk of a 30% increase, which is a little bit less than what I would like to see. Can the Minister give this House assurances that the increase will not sit at 30%, and that the Government will strive for more face-to-face assessments? Nothing beats seeing the white of a person’s eye.

[Sir Stephen Timms]

We would certainly like to do so. Let us get up to the level that we have set, which will be a dramatic improvement on the situation we inherited. Once we have done so, we will learn the lessons and see what more we can do.

I very much welcome the comments made by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who chairs the Work and Pensions Committee. I commend her and the Committee for their work. She referred to the research—published, I think, towards the end of last year—showing that children who suffer poverty and adversity in childhood are, as she said, five times more likely to be NEET as young adults. I looked at that interesting paper, and I think I am right in saying that it found that children who had grown up just below the poverty line, but without childhood adversity as well, were three times more likely to be NEET as young adults, so just poverty on its own leads to a big increase in the likelihood of being NEET. In order to tackle this big NEET problem—the shadow Minister was right to say that it needs tackling—we have to tackle child poverty, as we are doing with the scrapping of the two-child limit in universal credit.

[Debbie Abrahams]

My right hon. Friend is absolutely right about those two figures. The fact is that more than half of the current NEET cohort—52.9%—have experienced not just child poverty, but family adversity. That is the five times more likely figure.

[Sir Stephen Timms]

It is an interesting paper, and I very much welcome research along those lines, as I know my hon. Friend does. She is right to make the point that spending on social security is not rocketing. It is not out of control as one sometimes reads, but is between 10% and 11% of GDP. Working-age benefits are 4% to 5% and pretty consistent. It is not changing rapidly at the moment. She makes an interesting point, as did my hon. Friend the Member for Poole (Neil Duncan-Jordan), about the current depth of poverty. That is an important part of the picture that we need to address in our work.

I agree with my hon. Friend the Member for Oldham East and Saddleworth that the social security system has an important job to do. We cannot just freeze it for a year and under-uprate it for another year, because that inflicts harm. We have seen that harm inflicted and the consequences of it. She is also right that we need a properly functioning health service again. We also need support for good employment. I was pleased to hear from her and the hon. Member for Torbay (Steve Darling) that the Work and Pensions Committee has been listening to Sir Charlie Mayfield and his excellent “Keep Britain Working” review, from which he is continuing to develop work.

The hon. Member for Torbay rightly referred to the practice of shuffling people off the books. Too often, people have run into a health problem in the course of their work, had to take time off and then, by accident really, lost touch with work and the workplace and become unemployed and inactive. If there had just been a bit of flexibility and a bit of continuing communication, that outcome could have been avoided. I welcome the work that Sir Charlie Mayfield is doing with more than 100 vanguard employers looking at how best to put those lessons into practice.

The hon. Member for Torbay also referred to the carer’s allowance overpayments scandal. We appointed Liz Sayce OBE to conduct an independent review of how overpayments occurred, how affected carers could be supported and how to prevent future problems with overpayments arising. The review made 40 recommendations, and the Government have accepted or partially accepted 38 of them. We have taken action to raise the earnings limit in carer’s allowance by the largest amount it has ever increased by. In future, we will uprate the earnings threshold annually in line with the increase in the national living wage, so that accidental exceeding of the earnings threshold will be less common.

The hon. Member for Torbay also drew attention to the difficulties with the current cliff edge arrangements for the carer’s allowance earnings threshold. In the 2024 Budget, the Chancellor announced that we were considering the introduction of an earnings taper to replace that cliff edge, and we may well conclude that that would do a better job.

I do not think I ever expected there to be a Labour Member of Parliament for Poole, but I am delighted that my hon. Friend was successful in being elected to that role, and long may he serve there. He was right to highlight the continuing scale of the challenge of pensioner poverty. If we look at the record of the former Labour Government, we see that there were dramatic reductions in both child poverty and pensioner poverty. In respect of child poverty, those reductions were reversed under the coalition and the Conservative Government, and towards the end of the term of the Conservative Government the number of pensioners in poverty was rising again, but it rose much less dramatically than the number of children growing up below the poverty line. Our priority has therefore been to tackle child poverty, and that is the reason for the strategy that we have published and the changes to universal credit that we debated in the House last week.

However, I recognise that there are continuing challenges for pensioners as well. The Government are increasing the basic state pension and the full rate of the new state pension, in line with earnings growth, by 4.8%, meeting our commitment to the triple lock. We are increasing the pension credit standard minimum guarantee in line with earnings, by 4.8%, to support pensioners on the lowest incomes. We are increasing benefits to meet additional disability needs and carers’ benefits, in line with prices, by 3.8%. We are increasing a number of working-age benefits, statutory payments and disability benefits in line with prices by the same amount, 3.8%. The Guaranteed Minimum Pensions Increase Order requires formerly contracted out occupational pension schemes to pay an increase of 3% on GMP—for the reasons I gave earlier—in payment earned between April 1988 and April 1997, to give a measure of protection against inflation for those pensioners which is paid for by their scheme.

I commend both orders to the House.

Question put and agreed to,

Resolved,

That the draft Guaranteed Minimum Pensions Increase Order 2026, which was laid before this House on 12 January, be approved.

Social Security

Resolved,

That the draft Social Security Benefits Up-rating Order 2026, which was laid before this House on 12 January, be approved. —(Sir Stephen Timms.)