Benefit uprating index follows calendar-year CPI, not September CPI (3.4% vs 3.8% for April 2026) #2533

What the model does (main 42c01db)

gov.benefit_uprating_cpi is uprated by gov.economic_assumptions.indices.obr.lagged_cpi, which economic_assumptions/lag_cpi.py builds as the previous calendar year's CPI growth from yoy_growth.obr.consumer_price_index. That series is the calendar-year average, not the September 12-month rate.

The law

The Social Security Benefits Up-rating Order 2026 (SI 2026/148) raises the CPI-linked amounts by 3.8 per cent, the September 2025 CPI rate (articles 4(1), 4(3), 6(2), and the amounts in articles 15, 28, 29 and Schedule 13). DWP's "Benefit and pension rates 2026 to 2027" shows the same rises, for example PIP daily living enhanced £110.40 to £114.60 and Carer's Allowance £83.30 to £86.45. The ONS CPI annual rate for September 2025 is 3.8%; the 3.4% the model uses is the 2025 calendar-year average.

The model already holds September CPI as statutory_uprating_inputs.cpi_september and builds yoy_growth.september_cpi_uprating from it (3.8% for 2026), but uses it only for the tax thresholds.

This is not covered by earlier work. #1183 asked for benefits to be uprated by September CPI; #1228 closed it by lagging the calendar-year series by one year rather than switching to September CPI. #2179 and #2180 moved the income tax and NICs thresholds to September CPI but left the benefit index as it was.

What it affects

2026-27 amounts on main: no effect. Every live CPI-linked benefit amount has an explicit 2026 value, and uprating takes the ratio of the index from the last explicit value, so the 3.4% does not reach them. Checked: PIP, DLA, Attendance Allowance, Carer's Allowance, contribution-based and income-based JSA, Housing Benefit and Income Support allowances, Pension Credit additions, and UC child, carer, disabled child and work allowance amounts all match the Order, and Child Benefit (£27.05 and £17.90) matches GOV.UK. State Pension uses the triple lock index (4.8%) and the UC standard allowance and protected LCWRA amount have legislated 2026 values. The only index-driven amounts with 2026 growth of 3.4% are the tax credit elements, which are inactive in the model from 2025 (gov.dwp.tax_credits.active is false).

Amounts uprated from 2025-26 by the index. Any amount without a legislated 2026 value takes the 3.4% and stays 0.4 points low from then on. One example is the inactive-rebalancing counterfactual in #2521: with gov.dwp.universal_credit.rebalancing.active false, a single LCWRA claimant gets £437.66 a month in 2026-27 (£423.27 × 1.034) instead of £439.35 at 3.8%, £1.69 a month or £20.32 a year lower. The gap carries into 2027-28 (£447.73 against £449.46). Another is scenarios/reindex_benefit_cap.py, which uprates the frozen benefit cap from its 2025 values by this index: the single outside-London cap becomes £15,254.61 in 2026-27 (3.4%) rather than £15,313.61 (3.8%), £59 a year lower.

2027-28 onwards. All CPI-linked benefits, and the UC standard allowance and protected LCWRA indices built from this index, rise by the OBR calendar-year forecast (2.3% for April 2027) rather than September CPI. The 3.8% in the 2026 Order is the September 2025 rate, and the Universal Credit Act 2025 s. 1(3) defines the relevant CPI percentage as the rise in CPI for the September before the tax year. September 2026 CPI is due from the ONS later in October 2026.

Suggested fix

Build the benefit index from September CPI: outturn from statutory_uprating_inputs.cpi_september where published, then a forecast of September CPI, in the way september_cpi_uprating is built for the tax thresholds. Add a test that the index rises 3.8% from 2025 to 2026.

Sources

• SI 2026/148: https://www.legislation.gov.uk/uksi/2026/148/made
• DWP, Benefit and pension rates 2026 to 2027: https://www.gov.uk/government/publications/benefit-and-pension-rates-2026-to-2027
• Universal Credit Act 2025 s. 1: https://www.legislation.gov.uk/ukpga/2025/22/section/1
• GOV.UK, Child Benefit rates: https://www.gov.uk/child-benefit/what-youll-get
• ONS D7G7, CPI annual rate: https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7g7/mm23

🤖 Generated with Claude Code