MPs approve moves to increase state pension and benefits from April

A £6.9 billion increase to spending on state pensions and benefits from April has been supported by MPs.

The order approved in the House of Commons included a 4.1% increase to the state pension in line with the growth in average earnings while most other benefit rates will rise by 1.7% from April in line with inflation.

Work and pensions minister Sir Stephen Timms told the Commons: “The Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by the highest of the growth in earnings or prices or 2.5%.

“This will mean 4.1% for 2025/26. From April this year the basic state pension will increase from £169.50 per week to £176.45, and the full rate of the new state pension will increase from £221.20 to £230.25.

“We are fully committed to maintaining the pensions triple lock. There’s some confusion currently about the position of the party opposite.”

Conservative MP Luke Evans (Hinckley and Bosworth) asked Sir Stephen if the Government would adopt a policy pushed by the Tories at the last election to introduce the triple lock plus, which was designed to ensure the personal allowance for income tax would rise in future in line with increases in the main rate of the new state pension.

Sir Stephen, in his reply, said: “We don’t have any plans to do what he suggests.”

Cap

On pension credit, Sir Stephen said the standard minimum guarantee would increase by 4.1% from £218.15 to £227.10 per week for single pensioners and from £332.95 to £346.60 per week for couples.

Former Labour leader Jeremy Corbyn asked Sir Stephen about the future of the two-child benefit cap and also on whether the Government would “revisit the whole idea of the welfare cap with a view to abolishing it”.

The £137.4 billion welfare cap set by the previous government for 2024/25 is on course to be exceeded by £8.6 billion.

Sir Stephen, on the two-child limit, highlighted the work of the child poverty taskforce.

He said: “That is looking in a very ambitious way at the whole range of levers that the Government has at its disposal for tackling the problem of child poverty.”

The minister added: “Part of the consideration certainly will be social security changes … we’re not able to say that the two-child limit will be removed, but all of those things will be considered very carefully in the course of producing the report, which the taskforce will bring forward.”

Sir Stephen said the Government is “not looking” at changing the arrangements around the overall welfare cap.

Triple lock

He noted last week’s debate on the issue, adding: “There’s certainly scope for debate about that and about the benefit of the cap as well, but we’re not proposing any changes to those arrangements in the short-term.”

Shadow work and pensions minister Danny Kruger said the Conservatives supported the move to uprate pensions although he faced questions over his party’s stance on the triple lock.

Conservative Party leader Kemi Badenoch last month suggested she would look at means testing when asked about the future of the triple lock.

During a phone-in on LBC, Mrs Badenoch was asked whether she would “look at” the triple-lock, to which she replied: “We’re going to look at means-testing. Means-testing is something which we don’t do properly here.”

Responding to Sir Stephen, Mr Kruger said: “I think he’s misunderstood or our leader’s position has clearly been misquoted.

“We’re not looking at cancelling the triple lock, it’s his colleague the new pensions minister (Torsten Bell) who has been very clearly quoted saying that the triple lock is a silly system and indefensible.”

Asked if he agreed with shadow chancellor Mel Stride that the triple lock is “unsustainable”, Mr Kruger replied: “There are clearly questions on the long-term sustainability of our pensions system and national insurance fund, but I think he was talking about the very long-term rather than the immediate situation that we’re in.

“There’s no intention to review the triple lock at this stage on our benches anyway.”

Elsewhere the House also approved motions to set various national insurance thresholds and uprate child benefit and guardian’s allowance.

Change

Treasury Minister James Murray said: “These regulations fix most of the rates and thresholds for National Insurance contributions, which they cover at their 2024/25 levels for the 2025/26 tax year.”

He added: “These regulations also make provision for a Treasury grant, they extend the veterans employers’ national insurance contributions relief and increase the rates of child benefit and guardians allowance in line with prices.”

Mr Murray earlier stated: “The Government has had to make difficult decisions to fix the public finances. One of the toughest decisions we faced was to increase the rate of employee National Insurance contributions and reduce the secondary threshold.

“Although those changes are the subject of a separate bill and not the regulations before us, they are the context in which our decision to maintain other targeted National Insurance contributions reliefs are so important.”

Shadow treasury secretary Gareth Davies said: “The overall picture here in these regulations is very much one of continuity, not of change.”