Ms Reeves said: “This commitment means that while working-age benefits will be uprated in line with CPI, at 1.7% the basic and new State Pension will be uprated by 4.1% in 2025-26.”
That is because the rise is based on September’s inflation figure in a process known as “uprating”.
The following benefits are also legally required to increase each April in line with the previous September’s rate of inflation:
Ms Reeves said she will raise the limit people can earn before being ineligible for the carers allowance from £151 a week to £181.
The current earnings cap of £151 a week after income, national insurance and expenses has been criticised as far too low.
It has seen many selfless carers unknowingly bust the limit and later told to repay large sums of their benefits.
The Sun first revealed the changes were expected at the Budget last week – and it was welcomed by campaigners.
Helen Walker, Chief Executive of Carers UK, said: “We found 4 in 10 unpaid carers were pushed out of work because of problems with the earnings limit, plunging many into poverty.
“This new measure will help many more unpaid carers up and down the country to stay in paid work, putting much-needed finances into families’ pockets.”
The little-known savings account gives people on benefits, including Universal Credit and Working Tax Credit, a bonus of 50p for every pound they save, up to a maximum bonus of £1,200.
All savings are secure as the scheme is backed by the government.
The government is also extending the scheme so all Universal Credit claimants who work are eligible.
Previously, you, or you and your partner, must have earned £722.45 or more from paid work in your last monthly assessment period to qualify.
It has launched a consultation today into how it will deliver the “reformed and improved” version of the scheme.
In the Statement documents, it said: “The government will extend the current Help to Save scheme until 5 April 2027.
“With effect from 6 April 2025, eligibility will be extended to all Universal Credit claimants who are in work.
“A delivery consultation, including details of a reformed and improved scheme, has been published alongside the Budget.”
Housing benefit and pension credit
Through digging through the documents, The Sun also found that in a bid to increase pension credit take up – the government will be actively writing to housing benefit claimants encouraging them to apply for pension credit to.
The government has been working to maximise pension credit take up, particularly since it became one of the key benefits that can get the Winter Fuel Payment.
In the Budget documents, it said: “There has been a significant increase in Pension Credit claims following the announcement to target Winter Fuel Payments.
“The government is optimising the use of Housing Benefit data and individuals applying for Housing Benefit from Spring 2025 will be proactively encouraged to apply for Pension Credit.”
The government is contacting 120,000 pensioners currently in receipt of housing benefit inviting them to claim pension credit too.
It will also be bringing together the administration of the two benefits for new claimants from 2026.
This is two years earlier than previously announced and aims to support more people to receive the benefits that they are entitled to.
Addressing Parliament, Reeves said: “I can today announce that we are introducing a new Fair Repayment Rate to reduce the level of debt repayments that can be taken from a household’s Universal Credit payment each month from 25% to 15% of their standard allowance.
“This means that 1.2 million of the poorest households will keep more of their award each month lifting children out of poverty and those who benefit will gain an average of £420 a year.”
The Department for Work and Pensions can deduct money from a Universal Credit claimant’s allowance to help them pay back debt.
These can cover a range of debts, such as benefit advances, overpayments of child tax credits, rent and council tax areas, as well as outstanding water and utility bills.
Under previous rules, the DWP and third parties could deduct up to 25% of a claimant’s standard allowance to help manage their debt repayments.
But this has now been capped at 15% in efforts to help some of the worse-off homes across the UK pay off what they owe over a longer period.
The measure known as the Fair Repayment Rate will come into effect next April.
Surplus earnings threshold extended
Universal Credit claimants will continue to get the higher surplus earnings threshold of £2,500 until March 2026.
Surplus earnings are taken into account in your next monthly assessment period for Universal Credit.
For example, if your monthly earnings are more than £2,500 over where your payment stopped – the current threshold – this becomes “surplus earnings”.
These surplus earnings are then carried forward to the following month, where they count towards your earnings.
If your regular income and surplus earnings are then still over the amount where your payment stops, your Universal Credit payment will be affected.
Move to Universal Credit
The government also confirmed in the Budget documents, that it is speeding up the move for those on Employment and Support Allowance (ESA) claimants onto UC.
It said it brought the start date forward from 2028 to September 2024.
The documents read: “This move will bring more people into a modern benefit regime, continuing to ensure they are supported to look for and move into work.Â
“Around half of ESA claimants will receive more financial support on UC, while others will receive transitional protection to ensure nobody is worse off at the point at which they move over to UC.”
Everything you need to know about Universal Credit