Every April, the Department for Work and Pensions (DWP) revises the majority of benefit payments to align with inflation, ensuring claimants receive sufficient financial support as the cost of living rises. For the 2025-2026 tax year, Chancellor Rachel Reeves has announced that benefits will increase by 1.7%, reflecting the inflation rate recorded in September 2024. Meanwhile, state pensions will see a larger boost of 4.1%, safeguarded by the triple lock mechanism, which guarantees pensions rise by the highest of wage growth, inflation, or 2.5%.
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These new rates will officially take effect on April 7, 2025, and remain in place until April 6, 2026. However, a significant delay in receiving these increases may affect a wide range of claimants due to the payment schedule used by the DWP.
Delayed Payments: Why the Increase Won’t Reflect Immediately
Payments in Arrears: A Common DWP Practice
The DWP typically pays benefits and state pensions in arrears, meaning claimants receive payments for the period that has already passed. This delay is particularly noticeable for state pensioners, who often receive their payments on a four-week cycle. As a result, pensioners may not see the extra £9 per week—equating to an annual increase of approximately £475—until May 2025.
Similarly, Universal Credit claimants, who receive monthly payments, often face a waiting period of about five weeks before seeing changes reflected in their accounts.
Impact on Devolved Benefits
The delay also extends to devolved benefits in Scotland, such as:
- Adult Disability Payment
- Child Disability Payment
- Carer Support Payment
- Pension Age Disability Payment
These benefits, like their DWP counterparts, will rise by 1.7% but may not be immediately reflected in payments.
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Changes to Tax Credits and Legacy Benefits
In addition to benefit payment increases, a significant system change will take effect next April. On April 5, 2025, the Tax Credit service will officially shut down. Remaining accounts will be closed as part of the DWP’s managed migration process, which has been transitioning claimants to Universal Credit over the past few years.
For those still using Tax Credits, it is crucial to understand the timeline for this transition and ensure your details are up to date to avoid disruptions in payments.
Key Takeaways for Claimants
- State Pensions: Expect an increase of £475 annually, but payments may not reflect this until May 2025.
- Universal Credit: Payments could take up to five weeks to update.
- Devolved Benefits: Similar delays are likely for claimants in Scotland.
- Tax Credits: Accounts will be closed on April 5, 2025, as the system transitions to Universal Credit.
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Stay Informed
The DWP has published detailed information on all benefit and state pension rate changes, including any applicable premiums, on the Gov.uk website. Claimants are encouraged to review this information and monitor their payment schedules closely. If you are unsure how these changes affect your payments, contacting the DWP or seeking advice from a benefits adviser may be beneficial.
By staying proactive, claimants can better prepare for these delays and ensure they receive the financial support they’re entitled to in 2025.
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