The DWP has announced the proposed benefit and pension rates for 2015/16. There are a few interesting points to note in (and not in) the 15 pages of figures:

• The basic state pension will rise by £2.85 a week to £115.95. That is an increase of 2.5%, in line with the triple lock. CPI inflation would have produced only 1.2%, while the earnings link would have yielded an even smaller increase. As several commentators have pointed out, in current economic conditions the triple lock is an expensive feature that transfers wealth to an already affluent generation.

• Other state pensions (Additional Pension, Graduated Pension) will increase in line with the CPI to September 2014, ie 1.2%.

• The threshold for the standard minimum income guarantee (MIG) will rise by the same £2.85 a week, to £151.20 a week for a single person. As a consequence (see 1.235 of the Autumn Statement), the projected single tier pension will rise by the same amount to £151.25 a week. The 5p-more-than-MIG approach is a subtle way of keeping down the cost of the single tier pension: in percentage terms the rise is 1.92%.

When a figure for the single tier pension was first floated in a Green Paper, it was ‘about £140 a week’ in 2011/12 terms against a MIG of £137.35 and a basic state pension of £102.15. Since then to 2015/16 the basic state pension has risen by 13.5% while the projected single tier pension is up just 8.0%. The cash gap between the two has actually shrunk by £2.55 a week – not what might have been expected.

• Those in receipt of Savings Credit (which disappears for anyone with a single tier pension) will be hit by a £6.15 a week (5.1%) rise in the threshold for a single person. The logic behind this is that the MIG threshold is meant to increase only in line with earnings (0.6%), but the government has chosen to increase it in line with the basic state pension (as it has for the past five years). To claw back the cost of this additional increase, the Savings Credit threshold has been raised, reducing the maximum payment by £1.98 a week.

• With the exception of benefits paid for reason of disability, other benefits for people of working age are mostly being uprated by 1%, as they were last year. This was meant to be an affordability measure, but the fall in inflation has made the increase only 0.2% below the relevant CPI figure.


Welfare spending will account for £218.3bn in 2015/16, 29.3% of the government’s total managed expenditure (TME). As the Autumn Statement suggests TME will fall from 39.5% of national output in 2015/16 to 35.2% in 2019/20, decreases to welfare spending are virtually certain.

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