(Image: Yui Mok)
Many benefit claimants will be hoping to see their payment rates increase next year, after the CPI figures for September - traditionally the figure on which benefits rises are pegged - hit 3.5%.
While the final amounts will have to be confirmed by the chancellor in the Autumn Budget next week, the Department for Work and Pensions (DWP) used the September 2025 figures for the basis of this year's inflationary rise.
For pensions, the increase is likely to be even higher, taking into account the Triple Lock pledge, as the average increase in total wages across the UK for May to July was 3.9%.
What doers this mean for Universal Credit claimants?
For most working age benefits, the uprating is usually linked straight to CPI. For the Universal Credit standard allowance, it is not. The Universal Credit Act 2025 requires the Secretary of State to increase the standard allowance by at least the September CPI increase and then by a further amount on top, so many will see the 3.9% figure, plus another amount.
It's also worth bearing in mind that there have been changes to the health element of Universal Credit and the benefit cap was frozen and may be again, so this may affect the total amount of benefit you can get.
Many benefits are not claimed each year. Use a benefits calculator to find out what other benefits you might be entitled to, for example, Personal Independence Payment (PIP) if you have a long-term health condition or disability.
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What is significant about September's CPI figures?
The September inflation rate is typically used to decide the level of increase for many benefits, such as universal credit, tax credits and disability benefits.
This rate is also a key part of the pension triple lock, which is used to decide how much pensions will increase by in the following April.
However, the increase is based on either this inflation rate, average earnings growth between May and July, or 2.5%.
Given earnings growth was confirmed as 4.8%, the inflation rate would only have been used if there was a shock acceleration beyond this level.
Why petrol and diesel prices pushed inflation higher
Transport costs made the biggest contribution to September's rise, with average petrol and diesel prices reaching their highest levels in four years.
ONS chief economist Grant Fitzner said: “Inflation climbed notably in September to its highest annual rate in almost a year.
“Increased fuel prices were again the main driver, with the cost of diesel the highest since July 2022.”
Airfares, computer games and live events also contributed to the increase, while hotel prices rose by less than they had a year earlier.