The first Budget of Prime Minister Andy Burnham's Government, scheduled for October 28, is expected to reveal crucial details about Personal Independence Payments (PIP) and other benefit increases for April 2027. New Chancellor John Healey is set to announce the new rates, which are typically based on the Consumer Prices Index (CPI) inflation rate from the previous September.
What to Expect from the October Budget
The Budget will outline how much benefits such as PIP, Universal Credit, Housing Benefit, and Employment and Support Allowance (ESA) will rise by in the next financial year. Earlier this year, benefits increased by 3.8% based on the September 2025 inflation figure. The upcoming announcement will follow the same formula, using the September 2026 CPI figure, which will be available by the time of the Budget.
PIP, which is currently worth up to £194.60 a week, provides essential financial support to around four million people with disabilities. The exact increase will depend on the inflation rate, but the mechanism ensures that payments keep pace with the cost of living.
State Pension and the Triple Lock
While most benefits rise in line with inflation, the state pension follows a separate 'triple lock' system. This guarantees an increase based on whichever is highest out of inflation, wage growth, or 2.5%. This means pensioners could see a different percentage rise compared to other benefit claimants.
The triple lock has been a key policy for successive governments, aiming to protect pensioner incomes. However, it has also been a source of debate, with some arguing it is unsustainable in the long term.
PIP Review: Interim Report Finds Benefit 'No Longer Fit for Purpose'
The October Budget comes amid an ongoing review into the future of PIP. An interim report has already concluded that the disability benefit is no longer fit for purpose, raising questions about how it will be reformed. Full recommendations are set to be handed to Burnham and Healey in November, ahead of an expected overhaul of the benefit.
The review is examining whether PIP adequately supports disabled people in meeting the extra costs they face. Critics have long argued that the assessment process is flawed and that the benefit does not always reach those who need it most. The final recommendations could lead to significant changes in how disability support is provided.
Impact on Claimants
For the four million people currently receiving PIP, the upcoming Budget and the review's outcomes will be closely watched. Any changes to eligibility or payment rates could have a major impact on their financial stability. The Government has pledged to reform the benefit to make it more responsive to individual needs, but details remain scarce.
According to the interim report, the current system is 'no longer fit for purpose', indicating that substantial changes are likely. Claimants and disability rights groups are calling for a system that is fairer, more transparent, and easier to navigate.
What Happens Next?
With the Budget on October 28 and the full PIP review due in November, the coming months will be critical for benefit claimants. The Government is expected to set out its vision for welfare reform, balancing fiscal responsibility with the need to support vulnerable people.
As the Chancellor prepares to deliver the Budget, all eyes will be on the inflation figures and the Government's spending priorities. For now, claimants are advised to stay informed and prepare for potential changes that could affect their benefits from April 2027.
