Uprate benefits by the previous September's CPI

changelog.d/benefit-uprating-september-cpi.changed.md

@@ -0,0 +1 @@
+Uprate benefits each April by the previous September's CPI, the measure every Social Security Administration Act 1992 s150 review uses, instead of the previous calendar year's CPI (#2533). `gov.benefit_uprating_cpi` now follows `gov.economic_assumptions.indices.september_cpi_uprating`, so the Universal Credit standard allowance and health element indices built on it follow September CPI too, as the Universal Credit Act 2025 requires. Add September 2026 CPI (3.5%, ONS 21 October 2026), which sets the April 2027 rise. IIDB moves from same-year calendar CPI to the benefit index. Propagate the index to the Universal Credit childcare cap so it uprates after its last published value. Amounts not raised by September CPI in practice that were on the index (Pension Credit standard minimum guarantee and savings credit threshold, Housing Benefit pension-age allowances and non-dependant deduction income bands, DfE funding rates, council tax high value surcharge) keep their previous lagged calendar-year CPI projection. This remains a placeholder for the earnings-linked Pension Credit and Housing Benefit group; the savings credit threshold and pension-age allowances are within the s150 review.

docs/book/assumptions/growthfactors.md

@@ -34,6 +34,18 @@ We apply this to: `diesel_spending`, `petrol_spending`
 
 The pump prices that turn spending into litres (`household.consumption.fuel.prices.petrol` and `.diesel`) are DESNZ calendar-year averages (Quarterly Energy Prices tables 4.1.1 and 4.1.2), the same basis Microcosm UK uses to price household fuel spending. The spending growth rates (`petrol_spending_litre_proxy`, `diesel_spending_litre_proxy`) are derived from those prices, so that weighted litres follow the volume path above: (1 + growth) = (1 + volume growth) × price<sub>t</sub> / price<sub>t−1</sub> ÷ (1 + population growth). Whenever the prices change, re-derive the growth rates; a test checks that they match.
 
+## Benefit uprating (September CPI)
+
+Most benefit rates rise each April by the CPI 12-month rate for the
+September before, as in the annual review under Social Security
+Administration Act 1992 s150 ([written statement HCWS1101](https://questions-statements.parliament.uk/written-statements/detail/2025-11-26/hcws1101):
+3.8% for April 2026). Published September figures come from ONS series D7G7
+(3.5% for September 2026, which sets April 2027); later years use the OBR's
+September CPI forecast and, after the EFO horizon, calendar-year CPI. Each
+figure is rounded to 0.1 percentage points, and a fall in prices leaves rates
+unchanged. Parameters with `uprating: gov.benefit_uprating_cpi` rise by these
+rates after their last published value.
+
 ## Average earnings
 
 ```{note}

policyengine_uk/parameters/gov/benefit_uprating_cpi.yaml

@@ -1,7 +1,15 @@
-description: Most recent September CPIH index value, updated for each uprating occurrence (2005=100).
+description: Index of the April prices uprating of benefits, which rises each April by the previous September's CPI inflation. Only ratios between dates are meaningful.
 values:
   2005-01-01: 100
   2010-01-01: 114.48
 metadata:
   label: Benefit uprating index
-  uprating: gov.economic_assumptions.indices.obr.lagged_cpi
+  # April Y uses September Y-1 CPI; see create_september_cpi_uprating.py.
+  uprating: gov.economic_assumptions.indices.september_cpi_uprating
+  reference:
+    - title: Social Security Administration Act 1992, s150 (annual up-rating of benefits)
+      href: https://www.legislation.gov.uk/ukpga/1992/5/section/150
+    - title: Statutory Review of State Pension and Benefit Rates 2026/27, written statement HCWS1101 (26 November 2025)
+      href: https://questions-statements.parliament.uk/written-statements/detail/2025-11-26/hcws1101
+    - title: Explanatory Memorandum to the Social Security Benefits Up-rating Order 2026 (SI 2026/148), paras 6.4-6.5 (CPI in the year to September 2025)
+      href: https://www.legislation.gov.uk/uksi/2026/148/pdfs/uksiem_20260148_en_001.pdf

policyengine_uk/parameters/gov/dfe/childcare_funding_rate.yaml

@@ -7,7 +7,11 @@ metadata:
   threshold_unit: year
   amount_unit: currency-GBP
   label: Childcare entitlement hourly rates by age
-  uprating: gov.benefit_uprating_cpi
+  # Not uprated by September CPI: DfE funding rates are not amounts in the
+  # Social Security Administration Act 1992 s150 review. Keeps the lagged
+  # calendar-year CPI projection it had through gov.benefit_uprating_cpi until
+  # its own basis is modelled.
+  uprating: gov.economic_assumptions.indices.obr.lagged_cpi
   reference:
     - title: House of Commons Library | Early years funding in England
       href: https://commonslibrary.parliament.uk/research-briefings/cbp-8052/

policyengine_uk/parameters/gov/dwp/IIDB/maximum.yaml

@@ -18,7 +18,8 @@ metadata:
     - title: Benefit and pension rates 2015 to 2016 (DWP, gov.uk)
       href: https://www.gov.uk/government/publications/proposed-benefit-and-pension-rates-2015-to-2016
   unit: currency-GBP
-  uprating: gov.economic_assumptions.indices.obr.consumer_price_index
+  # An Up-rating Order amount (Social Security Administration Act 1992 s150).
+  uprating: gov.benefit_uprating_cpi
 values:
   # 2015-16 to 2026-27: DWP Benefit and pension rates (gov.uk), each
   # year's rate as listed in that year's publication.

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/couple/aged.yaml

@@ -15,7 +15,12 @@ metadata:
   period: week
   unit: currency-GBP
   label: Housing Benefit couple pension-age personal allowance
-  uprating: gov.benefit_uprating_cpi
+  # Not uprated by September CPI: the pension-age personal allowances rose 4.75%
+  # in April 2026 (£244.40 to £256.00 single), when September CPI was 3.8%, and
+  # 2.3% in April 2017, when it was 1.0% (Benefit and pension rates 2026 to
+  # 2027, 2017 to 2018). Keeps the lagged calendar-year CPI projection it had
+  # through gov.benefit_uprating_cpi until its own basis is modelled.
+  uprating: gov.economic_assumptions.indices.obr.lagged_cpi
   reference:
     - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (SI 2006/214), Schedule 3, paragraph 1(2)(b)
       href: https://www.legislation.gov.uk/uksi/2006/214/schedule/3

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/couple/aged_from_cutoff.yaml

@@ -10,7 +10,13 @@ metadata:
   period: week
   unit: currency-GBP
   label: Housing Benefit couple personal allowance, State Pension age reached from April 2021
-  uprating: gov.benefit_uprating_cpi
+  # Not uprated by September CPI: the post-April 2021 pension-age personal
+  # allowances equal the Pension Credit standard minimum guarantee in every year
+  # from 2021-22 to 2026-27, which is reviewed against earnings under Social
+  # Security Administration Act 1992 s150A(1)(d). Keeps the lagged calendar-year
+  # CPI projection it had through gov.benefit_uprating_cpi until its own basis
+  # is modelled.
+  uprating: gov.economic_assumptions.indices.obr.lagged_cpi
   reference:
     - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) (Amendment) Regulations 2021 (SI 2021/188), regulation 2(3), inserting paragraph 1(2)(c) of Schedule 3 to SI 2006/214 from 1 April 2021
       href: https://www.legislation.gov.uk/uksi/2021/188/regulation/2/made

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/lone_parent/aged.yaml

@@ -16,7 +16,12 @@ metadata:
   period: week
   unit: currency-GBP
   label: Housing Benefit lone parent pension-age personal allowance
-  uprating: gov.benefit_uprating_cpi
+  # Not uprated by September CPI: the pension-age personal allowances rose 4.75%
+  # in April 2026 (£244.40 to £256.00 single), when September CPI was 3.8%, and
+  # 2.3% in April 2017, when it was 1.0% (Benefit and pension rates 2026 to
+  # 2027, 2017 to 2018). Keeps the lagged calendar-year CPI projection it had
+  # through gov.benefit_uprating_cpi until its own basis is modelled.
+  uprating: gov.economic_assumptions.indices.obr.lagged_cpi
   reference:
     - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (SI 2006/214), Schedule 3, paragraph 1(1)(b)
       href: https://www.legislation.gov.uk/uksi/2006/214/schedule/3

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/lone_parent/aged_from_cutoff.yaml

@@ -10,7 +10,13 @@ metadata:
   period: week
   unit: currency-GBP
   label: Housing Benefit lone parent personal allowance, State Pension age reached from April 2021
-  uprating: gov.benefit_uprating_cpi
+  # Not uprated by September CPI: the post-April 2021 pension-age personal
+  # allowances equal the Pension Credit standard minimum guarantee in every year
+  # from 2021-22 to 2026-27, which is reviewed against earnings under Social
+  # Security Administration Act 1992 s150A(1)(d). Keeps the lagged calendar-year
+  # CPI projection it had through gov.benefit_uprating_cpi until its own basis
+  # is modelled.
+  uprating: gov.economic_assumptions.indices.obr.lagged_cpi
   reference:
     - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) (Amendment) Regulations 2021 (SI 2021/188), regulation 2(3), inserting paragraph 1(1)(c) of Schedule 3 to SI 2006/214 from 1 April 2021
       href: https://www.legislation.gov.uk/uksi/2021/188/regulation/2/made

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/single/aged.yaml

@@ -15,7 +15,12 @@ metadata:
   period: week
   unit: currency-GBP
   label: Housing Benefit single pension-age personal allowance
-  uprating: gov.benefit_uprating_cpi
+  # Not uprated by September CPI: the pension-age personal allowances rose 4.75%
+  # in April 2026 (£244.40 to £256.00 single), when September CPI was 3.8%, and
+  # 2.3% in April 2017, when it was 1.0% (Benefit and pension rates 2026 to
+  # 2027, 2017 to 2018). Keeps the lagged calendar-year CPI projection it had
+  # through gov.benefit_uprating_cpi until its own basis is modelled.
+  uprating: gov.economic_assumptions.indices.obr.lagged_cpi
   reference:
     - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (SI 2006/214), Schedule 3, paragraph 1(1)(b)
       href: https://www.legislation.gov.uk/uksi/2006/214/schedule/3

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/single/aged_from_cutoff.yaml

@@ -10,7 +10,13 @@ metadata:
   period: week
   unit: currency-GBP
   label: Housing Benefit single personal allowance, State Pension age reached from April 2021
-  uprating: gov.benefit_uprating_cpi
+  # Not uprated by September CPI: the post-April 2021 pension-age personal
+  # allowances equal the Pension Credit standard minimum guarantee in every year
+  # from 2021-22 to 2026-27, which is reviewed against earnings under Social
+  # Security Administration Act 1992 s150A(1)(d). Keeps the lagged calendar-year
+  # CPI projection it had through gov.benefit_uprating_cpi until its own basis
+  # is modelled.
+  uprating: gov.economic_assumptions.indices.obr.lagged_cpi
   reference:
     - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) (Amendment) Regulations 2021 (SI 2021/188), regulation 2(3), inserting paragraph 1(1)(c) of Schedule 3 to SI 2006/214 from 1 April 2021
       href: https://www.legislation.gov.uk/uksi/2021/188/regulation/2/made