2019/20 is the final year of the four-year freeze, which keeps most working-age benefits and tax credits at their 2015/16 cash values. Non-frozen benefits, mainly those aimed at disabled people and carers, rise in line with CPI inflation (+2.4%). The triple lock delivers a 2.6% increase to the new State Pension (£168.60 in 2019/20) and the Basic State Pension (£129.20).Jump to full report >>
This note sets out the main benefit and tax credit rates for the 2019/20 financial year.
For the fourth year in a row, most working-age benefits are being kept at their 2015/16 cash value. This is the final year of the four-year benefit freeze announced at Summer Budget 2015.
Increases in benefits aimed specifically at disabled people and carers will continue to be linked to CPI inflation, resulting in a 2.4% increase in 2019/20.
The Basic and New State Pensions will be uprated in line with the triple lock that was introduced in 2012/13, i.e. by the highest of the increase in earnings, price inflation (as measured by the CPI) or 2.5%. For the purposes of the 2019/20 uprating, earnings growth (+2.6%) was the highest of these three benchmarks, meaning that:
Pension Credit Guarantee Credit is required to increase at least in line with earnings; in 2019/20 it will also rise by 2.6%.
Work Allowances in Universal Credit (the earnings threshold above which Universal Credit awards begin to be tapered down) are receiving an extra £1,000 increase (on top of normal CPI uprating). This was announced at Budget 2018.
Commons Briefing papers CBP-8458
Author: Roderick McInnes