Social Security Benefits: Cost of Living
The question
To ask the Secretary of State for Work and Pensions, whether she has made an assessment of the potential merits of creating an independent process to set benefit levels according to the cost of essentials.
Answered by Sir Stephen Timms
No assessment has been made. The Social Security Administration Act 1992 requires the Secretary of State for Work and Pensions to review benefit and State Pension rates each year to see if they have retained their value in relation to the general level of prices or earnings. Where the relevant benefit or State Pension rates have not retained their value, legislation provides that the Secretary of State is required to, or in some instances may, up-rate their value.
Following this review, benefit and State Pension rates are increased in line with statutory minimum amounts and others are increased subject to Secretary of State’s discretion.
Following the Secretary of States’ up-rating decisions for 2025/26, DWP expenditure on state pensions and benefits will increase by £6.9 billion.
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