Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, if she will make it her policy to uprate (a) inflation-linked benefits and (b) tax credits for the 2026–27 financial year in line with the consumer prices index rate of inflation for September.
The Social Security Administration Act 1992 requires the Secretary of State for Work and Pensions to review State pension and benefit rates each year to see if they have retained their value in relation to the general level of prices or earnings. Where the relevant rates have not retained their value, legislation provides that the Secretary of State is required to, or in some instances may, up-rate their value. Following this review, some rates are increased in line with statutory minima, and others are increased subject to the Secretary of State’s discretion.
The new and basic State Pensions, and the Standard Minimum Guarantee in Pension Credit (which replaced tax credits for most people above State Pension age on 5 April 2025). must be increased at least in line with the growth in earnings. In practice, the new and basic State Pensions are subject to our commitment for this Parliament to the triple lock of the highest of earnings growth, the increase in prices, or 2.5%
Additional-needs disability benefits such as Personal Independence Payment, Carer’s Allowance, and Additional Pension must be increased at least in line with the increase in prices. By convention, the measure used for this is the increase in the Consumer Prices Index (CPI) in the year to September.
For the rates of most other benefits, including Universal Credit (which replaced tax credits for people below State Pension age on 5 April 2025), once the Secretary of State has concluded her review of the increase in the general level of prices, she may decide to increase them. The Office for Budgetary Responsibility currently assumes that she will do so in line with the increase in CPI in the year to September. However, the Universal Credit and Personal Independence Payment Bill has been introduced into Parliament and subject to parliamentary approval, this will alter the standard parameters of Secretary of State's annual review.