Summary
Inflation will affect the increase in various benefits in the UK, including Universal Credit and state pensions, due to changes in prices over the past year. Universal Credit is expected to rise by about 6.2%, while state pensions will increase based on the highest percentage of inflation, wage growth, or a set percentage, known as the triple lock. Interest rates might be cut if inflation appears to be slowing down, which could lower borrowing costs.
Key Facts
- September's inflation rate is 3.8% and influences next year’s benefits increase.
- Universal Credit is expected to rise by 6.2%, accounting for inflation and an additional uplift.
- State pensions use a triple lock, rising by 4.8% based on earnings growth.
- New state pensions are projected to increase to £241.30 per week.
- Basic state pensions are projected to rise to £184.90 per week.
- Rising wages have slightly increased, but not much more than the price of a sausage roll, according to the Resolution Foundation.
- Possible interest rate cuts could reduce the cost of borrowing, including mortgages, if inflation comes down.
