Autumn Statement 2023 raises working-age benefits by 6.7% and state pension by 8.5% for 2024-25

Chancellor Jeremy Hunt announced in the Autumn Statement on 22 November 2023 that benefits for working-age people will rise by 6.7% from April 2024, and that the State Pension will rise by 8.5%¹. The benefit increase is in line with September's rate of inflation, rather than the lower October figure of 4.6% that had been suggested¹. The pension increase follows average wage growth, as guaranteed by the triple lock¹.

The 6.7% uplift covers universal credit and means-tested legacy benefits including personal independence payment (PIP) and employment and support allowance (ESA)¹. Monthly universal credit standard allowances, which exclude the housing and childcare elements, change as follows¹:

On pensions, someone who reached State Pension age before April 2016 would see their full weekly basic State Pension rise from £156.20 to £169.50, while someone on the full new State Pension would see their weekly payment go from £203.85 to £221.20 from April¹. Over the year compared with 2023-24, basic State Pension recipients would get up to £690 more for a single person and £1,104 more for couples, and new State Pension recipients up to £902 more¹.

The Chancellor also announced an increase to local housing allowance (LHA) to the 30th percentile of local rents in April 2024, ending a freeze in place since 2020¹. LHA sets the housing benefit or universal credit housing element tenants are eligible for, and the 30th percentile means recipients could afford the cheapest 30% of homes for their household size in their area¹. In the 12 months to October 2023, private rents rose by 6.1% on average in the UK to an all-time high¹. The Office for Budget Responsibility has confirmed rates will be frozen again from April 2025¹.

Sanctions tighten in several ways. The government will track each claimant's attendance at Jobcentre-organised job fairs and interviews, and the Restart scheme will be extended to people who have not found a job after six months on universal credit, instead of the current nine months¹. After a year without finding a job, claimants will be placed into a mandatory work placement¹. A claimant on an open-ended sanction for more than six months will have benefits stopped entirely and their case closed, and will also be denied free NHS prescriptions and legal aid¹. Work capability assessments will be changed to consider whether a person could work from home, which the government believes will reduce the number accepted for disability benefits¹.

Why it matters for households

Working-age claimants on universal credit and legacy benefits, including PIP, see payments rise 6.7% from April 2024, and the standard allowance figures above show the cash difference by household type¹. Pensioners receiving the basic or new State Pension see an 8.5% rise from April, worth up to £690 or £1,104 a year for basic State Pension singles and couples respectively, and up to £902 for new State Pension recipients¹. Private renters claiming housing support gain from LHA being set at the 30th percentile of local rents from April 2024, but that relief is temporary because rates are frozen again from April 2025¹. Claimants who do not meet job-search requirements face earlier intervention through the Restart scheme at six months, mandatory work placements after a year, and loss of benefits, free NHS prescriptions and legal aid after more than six months on an open-ended sanction¹. People assessed for disability benefits face a test that considers whether they could work from home¹.

What happens next

The benefit and State Pension increases, and the LHA change, take effect from April 2024¹. LHA rates are then frozen again from April 2025¹. The Restart scheme threshold moves from nine months to six months, and the sanctions and work capability assessment changes follow the timetable set out in the Autumn Statement¹.