All DWP payment hikes in full after Budget boost to PIP, UC and two-child cap

Rachel Reeves announced £15 billion in benefits spending at Wednesday’s Budget with increased payments for those receiving Universal Credit, PIP and child benefits

Everything you need to know about the Department for Work and Pensions (DWP) increases announced in the Budget 2025

• Rachel Reeves unveiled £15 billion in welfare expenditure during Wednesday’s Budget – featuring enhanced payments for recipients of Universal Credit, Personal Independence Payment (PIP) and child benefits.
• The Chancellor scrapped the two-child benefit cap, which means families surviving on benefits with three or more kids are in line for a big income boost. One mum-of-five said her monthly income will increase by £900.
• Ms Reeves also boosted disbursements for “working-age benefits” including Universal Credit, Personal Independence Payment (PIP) and child benefits in accordance with inflation, at 3.8%, commencing in April.
• This initiative is expected to cost up to £6billion. Consequently, payments for over 3.8 million PIP recipients are set to climb by 3.8% meaning individuals receiving the maximum awards for both daily living and mobility elements increase from £187.45 weekly to £194.55.
• While all benefits rise yearly alongside inflation, in 2026, an extra 2.3% boost beyond inflation will be applied to Universal Credit due to legislative changes this year, the Universal Credit Act 2025, which mandates that the benefit must exceed inflation annually until 2030.
• With September’s inflation rate at 3.8%, Universal Credit recipients will witness an above-inflation increase of 6.2% from April 2026, representing an extra £6 weekly for an individual claimant, or £312 per year.
• READ FULL STORY: DWP payment increases in full after PIP, UC and benefit Budget changes.

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