State pension and benefits go up, but cost-of-living pressures remain

New and higher rates for working-age benefits and the state pension have come into effect. 

But it’s a mixed picture for hard-pressed households, as they grapple with a range of bill increases, such as energy hikes and higher council tax. 

What are the new rates? 

Benefits increase by 1.7% 

People claiming universal credit will see a 1.7% increase in payments. 

Other benefits will also go up by the same amount, including: 

• personal independence payments 
• disability living allowance 
• carer’s allowance 
• child benefit 

State pension increases by up to £470 a year 

People receiving the full basic state pension will see their weekly payments go up from £169.50 to £176.45. 

According to the Department for Work and Pensions, this works out to an increase of £360 a year. 

Meanwhile, the full rate of the new state pension has gone up from £221.20 to £230.25 per week - an increase of £470 a year. 

Minimum guarantee for pension credit goes up 

The minimum amount that someone on pension credit can receive has gone up by 4.1%. 

Weekly payments for single pensioners have increased from £218.15 to £227.10, and they’ve gone up from £332.95 to £346.60 for couples. 

New minimum wage rates take effect 

This comes just days after many of the UK’s lowest-paid workers received an income boost. 

The national living wage for those aged 21 and over is now £12.21 an hour - up from £11.44 an hour. 

Meanwhile, the national minimum wage for 18 to 20-year-olds has gone up from £8.60 an hour to £10 an hour, and rates for 16 and 17-year-olds and apprentices have risen from £6.40 an hour to £7.55 an hour. 

Good news, but cost-of-living crisis still biting 

Uprating benefits and the state pension will undoubtedly be welcome news for many, and chancellor Rachel Reeves says the government is “putting money into people’s pockets”. 

But huge numbers of households will still be seeing money going out at an alarming rate too, as we’ve seen a raft of price increases this month. 

For example: 

• Ofgem’s energy price cap went up by 6.4% this month, adding an extra £111 a year onto the average household bill 
• millions of local authorities have put up council tax 
• a colour TV licence has gone up by £5 to £174.50 a year 

As the cost of living continues to rise, it’s worth taking the time to see where you could save money. 

We’ve created a handy guide - 50 ways you can save money in ‘awful April’ and beyond - to help you drive down costs. 

You might also want to try our budget planner, so you can see where money could be saved in your household and free up cash for vital expenses. 

And don’t forget to use our benefits calculator to check you’re not missing out on state support that could help you cover essential costs.