New direct Cost of Living Payments to households on means tested benefits
More than 8 million UK households on means tested benefits will receive an additional Cost of Living Payment of £900 in 2023-24.
This includes all households receiving the following benefits:
- Universal Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Pension Credit
- Working Tax Credit
- Child Tax Credit
These will be made in more than one instalment. DWP and HMRC will provide further detail on timing of these payments and eligibility dates in due course.
This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
New Cost of Living Payments for pensioners
More than eight million pensioner households across the UK will receive an additional £300 Cost of Living Payment for pensioners in 2023-24 to help with bills. This is in addition to the means tested benefit and disability payments, if eligible.
New Disability Cost of Living Payments for people on disability benefits
Over 6 million people across the UK on non-means-tested disability benefits will receive a further £150 Disability Cost of Living Payment in 2023-24. This is in addition to the Cost of Living Payments for households on means tested benefits and pensioner households, if eligible.
This includes everyone eligible for:
- Disability Living Allowance
- Personal Independence Payment
- Attendance Allowance
- Scottish Disability Benefits
- Armed Forces Independence Payment
- Constant Attendance Allowance
- War Pension Mobility Supplement
The Government is increasing benefits in line with inflation. This means that they will rise by September Consumer Price Index (CPI) inflation – 10.1%.
More than 10 million working age families will see their benefit payments rise from April 2023.
Nearly 12 million pensioners in Great Britain will benefit from a 10.1% increase to their State Pension in April 2023 under the triple lock.
This is worth over £870 next year on average. Per week, a full basic State Pension will increase from £141.85 to £156.20, and the new State Pension will increase from £185.15 to £203.85.
Benefit cap rise
In April 2023, the government will also increase the benefit cap in line with inflation by 10.1%. The benefit cap will rise from £20,000 to £22,020 for families nationally, outside of Greater London.
Lower caps for single households without children will rise from £13,400 to £14,753 nationally (higher for Greater London).
Household Support Fund extension
The Government is providing an extra £1 billion of funding to enable the extension of the Household Support Fund in England for a further year from April 2023.
Additional funding will be made available to all Local Authorities so those in need can access the fund by contacting their local xouncil. The money can be used to cover the cost of essentials like food, energy and water bills.
National Living Wage rise
From 1 April 2023, the National Living Wage (NLW) will increase by 9.7% to £10.42 an hour for workers aged 23 and over.
This represents an increase of around £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over 2 million low paid workers.
Young people and apprentices on the National Minimum Wage (NMW) rates will also see a boost to their wages. Rates will be increased for people aged 21-22 by 10.9% to £10.18 an hour, for those aged 18-20 by 9.7% to £7.49 an hour, for 16-17 year olds by 9.7% to £5.28 an hour, and for Apprentices by 9.7% to £5.28 an hour.
Energy Price Guarantee
The Energy Price Guarantee fixed the cost of energy so that a typical household pays the equivalent of £2,500 on their energy bills a year, saving the typical household £900 this winter.
From next April, this will change so that the typical household will now pay on average £3,000 a year.