Official Statistics

Abstract of DWP benefit rate statistics methodology statement

Updated 24 January 2024

1. Introduction

The Abstract of DWP benefit rate statistics is an annual release aiming to give users a reference source for benefit uprating. It shows the value of benefits over time compared to prices and earnings.

The main purpose of this methodology document is to provide users with information about the methods used to produce the release in accordance with practices set out in the Code of Practice for Official Statistics.

2. Abstract of DWP benefit rate statistics

The abstract contains a statistical summary to describe how benefits rates compare over time and a set of spreadsheet tables where users can compare the value of benefits against prices and earnings in more detail. It is published in the collection of Abstract of DWP benefit rate statistics.

To compare the value of benefit rates over time, the abstract collates relevant benefit rates information with price inflation indices and earnings growth data. All of the source data used by the abstract is already openly available and includes historical data and latest available figures. Benefit rate information comes from DWP. Earnings and inflation data are sourced from Office for National Statistics (ONS).

3. Production

The release is straightforward to produce. Most of its figures come from an Excel based model. Once the latest relevant sources on benefit rates, inflation and earnings are populated, formula are used to present historical rates in a comparable way. Once the model is complete, its outputs are exported to a set of spreadsheet tables where calculations and other links are removed for presentational purposes. The figures are then used to give meaning to narratives in the statistical summary. A statistician will undertake maintenance of the model, and check that sources going in are still the most appropriate. Their work is then checked by another member of the team.

4. How we compare the value of benefits over time

The tables in the abstract provide comparisons of benefit rates over time in relation to price inflation and earnings. The comparisons for price inflation provide two measures to capture relative benefit values at the beginning and the end of each uprating period.

The relative value of the benefit at start of previous uprating periods

This describes the weekly value of historic benefit rates in the prices for the latest period. This answers questions like how much were benefits in 1991 worth in relation to 2021, using the same price values.

Worked example based on the 2021 uprating of benefits

The full rate for Basic State Pension in 1991 was £52.00. How much was that worth in 2021?

To express this rate in April 2021 prices we look at the CPI index at two different time points: April 1991 and April 2021. We then use the increase in CPI over this period as a rating factor and apply that to the original benefit rate for 1991.

Calculation process

CPI in April 2021 is divided by CPI in April 1991

110.1 divided by 59.9 = 1.838

We then apply this rating factor to the 1991 benefit rate for Basic State Pension:

£52.00 multiplied by 1.838 = £95.58

Calculating the relative value of the benefit at the end of previous uprating periods

Building from the example above, the relative value of the benefit at the end of the 1991 uprating period can be expressed as follows.

Relative value example

In 1991, the average value for CPI in the financial year for 1991/1992 was 61.0667 at 4 decimal places. We now divide CPI in April 2021 by CPI average for 1991.

110.1 divided by 61.0667 = 1.80295

We then apply this rating factor to the 1991 benefit rate for Basic State Pension:

£52.00 multiplied by 1.80295 = £93.75

This figure represents the value of the Basic State Pension in 1991 expressed in 2021 prices after we account for the average inflation that occurred during 1991.

How benefits compare to earnings

A third measure provided by the abstract is to look at the value of benefits at each year in relation to earnings. We provide comparable figures for mean and median earnings but view the median earnings as a more reliable representation of what people earn.

Worked example for earnings

In April 2016, the full rate of the new State Pension was £155.65. Median weekly earnings were £538.60.

The new State Pension in relation to earning is therefore expressed as shown in the example.

Earnings example

£155.65 divided by £538.60 = 28.9%

5. Presentation

A statistical summary provides commentary on the latest findings and key messages. It is accompanied by a set of spreadsheet tables that compare the relative benefit rates over time using latest available pricing and earnings data.

At each release all language, key points, and themes within the abstract are kept consistent as far as possible. Content such as commentary and notations are reviewed at each release basis to provide the most appropriate advice on the interpretation of the figures.

Some presentational aspects may periodically change, for instance when new methods of benefit uprating are implemented. This happened in the 2010 edition when benefits changed to being uprated by the Consumer Price Index (CPI) rather than the ROSSI or Retail Price Index (RPI).

For the 2022 release we have focussed on improving accessibility in line with changing guidance. We have resolved the challenge of presenting multiple tables on a single worksheet by providing links to each table at the top of the worksheet.

6. Quality Assurance

As previously mentioned, production of the Excel model involves sourcing figures already published by DWP and ONS. Quality assurance checks start with checking that the source information is pertinent, reliable and that it has been applied correctly. As the figures are sourced manually they still need to be quality assured in case of manual error when copying them across to the Excel model.

A range of further quality checks extend to the statistical summary narratives, and the final spreadsheet tables, titles, hyperlinks, font size and so on. In line with Aqua Book principles, all quality check actions are set out and recorded in a log-book, and are checked off once completed to ensure that no steps are missed. Once all of the content is quality assured, products are signed off by a lead statistician.

7. Pre-publication

The release is pre-announced at least one month in advance in accordance with orderly release principles set out in section T3 of the Code of Practice for Statistics. Dates of future publications can be found via the Statistics at DWP web page (follow the guidance on upcoming statistics) and the National Statistics publication hub.

The release has been designated National Statistics, as such there is an internal departmental requirement to provide a ministerial submission ahead of each release. The submission is circulated to the ministers’ offices and contains contextual input from policy areas. The submission is sent up one day prior to release day. It is fully compliant with the UK Statistics Authority (UKSA) rules surrounding pre-release access of statistics. For transparency we publish details at Pre-release access to DWP statistics.

8. Publication

The Abstract of DWP benefit rate statistics is released on the website at 09:30am on its release day. The publication has its own landing page which contains a statistical summary and a set of spreadsheet tables (ODS). Its collection page is Abstract of DWP benefit rate statistics.

See Annex D for more information regarding older releases.

Annex A: Limitations and known issues

In the spreadsheet tables the number of weeks between uprating dates is not always the same as the period between reference dates for uprating of the RPI. For example, there were 54 weeks between the November 1979 and November 1980 upratings compared with 53 weeks between the RPI reference dates. No correction has been applied to allow for this difference.

Average earnings figures for the period prior to 1997 are taken from the New Earnings Survey (NES) estimates of earnings for all adults. No comparisons are available before the NES began in 1970.

Average earnings figures from 1997 onwards are taken from the Annual Survey of Hours and Earnings (ASHE) which replaced the New Earnings Survey (NES) in 2004. No ASHE figures are to be released prior to 1992.

Average earnings for months other than April use the figure for April of the same year.

Annex B: Conventions

Abbreviation	Meaning
£pw	Pounds per week
ASHE	Annual Survey of Hours and Earnings
BSP	Basic State Pension
ChB	Child Benefit
CPI	Consumer Prices Index
DWP	Department for Work and Pensions
ESA	Employment and Support Allowance
IB	Incapacity Benefit
IS	Income Support
IVB	Invalidity Benefit
JSA	Jobseeker’s Allowance
NES	New Earnings Survey
nSP	New State Pension
PC	Pension Credit
RPI	Retail Prices Index
SB	Sickness Benefit
SERPS	State Earnings Related Pension Scheme
SoS	Secretary of State
UB	Unemployment Benefit
UC	Universal Credit
WB	Widow’s Benefit
WP	Widow’s Pension
WPA	Widowed Parent’s Allowance

Annex C: Price and Earnings Indices used in the Abstract of DWP benefit rate statistics

The Abstract contains a lot of historical data and covers methodological changes in uprating over a long period of time. The method of uprating benefits is decided by the government of the day.

Major changes in uprating methods

Major changes:

• in 1974, long-term benefits such as pensions and long-term sick and disabled benefits were linked to the higher of one of two annual increases, as measured by the Retail Prices Index (RPI) and the Average Earnings Index

• in 1976 a forecast was used to estimate the movements in price inflation and earnings growth

• long-term benefits were linked to the prices index only in 1979

• a historical basis was used to calculate the price increases in 1983

• ROSSI was introduced in 1983, calculated as RPI (all items) less housing costs, to uprate income-related benefits

• in 1992 the definition of ROSSI changed to New ROSSI; this is calculated as RPI (all items) less rent, local taxes and mortgage interest payments

• since 1983, benefits have been uprated in relation to the RPI, ROSSI or New ROSSI. The actual increase in particular benefits depends on the index applied and on policy decisions as to the appropriate rate for the benefit

• in 2010 the Chancellor announced that from April 2011 most DWP administered benefits would be uprated in line with the Consumer Prices Index (CPI). Also, the Government reiterated previous commitments to restore the link between earnings and the uprating of the Basic State Pension. The Government has since applied a ‘triple lock’ guarantee; that the Basic State Pension will increase by the highest of the growth in average earnings, price inflation or 2.5%

• the Social Security (Uprating of Benefits) Act 2021 introduced an amendment to suspend the earnings element of the ‘Triple Lock’ for 2022. This was due to exceptional earnings growth (8.3%) following the Coronavirus (COVID-19) pandemic. Consequently, the State Pension was uprated by the higher of CPI inflation growth or 2.5% at April 2022
• the earnings element of the ‘Triple Lock’ was reinstated in 2023. State Pension rates were uprated in line with CPI of 10.1% in April 2023, which was higher than average wage growth (5.5%)

Table 1: Uprating of State Pension was based on the Triple Lock guarantee between April 2011 and April 2023. For April 2022 the earnings element of the triple lock was suspended, and uprating was based on the greater of Price Inflation (CPI) and 2.5%

Year	Uprating percentage	Basis for uprating
April 2011	4.6%	Price Inflation (RPI)
April 2012	5.2%	Price Inflation (CPI)
April 2013	2.5%	2.5% Minimum
April 2014	2.7%	Price Inflation (CPI)
April 2015	2.5%	2.5% Minimum
April 2016	2.9%	Earnings Growth
April 2017	2.5%	2.5% Minimum
April 2018	3.0%	Price Inflation (CPI)
April 2019	2.6%	Earnings Growth
April 2020	3.9%	Earnings Growth
April 2021	2.5%	2.5% Minimum
April 2022	3.1%	Price Inflation (CPI)
April 2023	10.1%	Price Inflation (CPI)

Source: Abstract of DWP benefit rate statistics.

• the new State Pension (nSP) was introduced on 6 April 2016 for people reaching State Pension Age (SPA) from that date. People who had already reached SPA continued to be entitled to the Basic State Pension and Additional State Pension, where applicable. There are transitional arrangements in place to ensure that the amount of state pension an eligible individual receives is not less than under the previous system, based on their National Insurance record to 5 April 2016. The nSP (excluding Protected Payments) is required by statute to rise in line with average growth in earnings, but currently has the “triple lock” guarantee applied until at least 2020

• for people who reached SPA before 6 April 2016, Pension Credit has two elements: the Guarantee Credit, which provides a minimum level of income; and the Savings Credit, which aims to provide an additional amount for people aged 65 and over who have made some provision for their retirement. The Savings Credit element was removed for people reaching SPA from 6 April 2016 when nSP was introduced. Legislation requires the Standard Minimum Guarantee (SMG) in Guarantee Credit to be uprated at least in line with earnings. In the years 2011-2015, uprating was underpinned by the “triple lock” guarantee. Between 2016 and 2019, the SMG has risen at least in line with earnings

• since April 2011, benefits to meet the additional costs of disability were increased in line with CPI inflation, as were most discretionary benefits and tax credits for working age people

• between 2013 and 2015, most discretionary benefits and tax credits for working age people were increased by 1% each year

• under the Welfare Reform and Work Act 2016, most discretionary benefits and tax credits for working age people were frozen at the April 2015 rates for four years

• when the Benefit Freeze ended in April 2020, the benefits were raised by 1.7%, in line with CPI price inflation. In April 2021, the benefits were raised by 0.5% in line with CPI price inflation. In April 2022, the benefits were raised by 3.1% in line with CPI price inflation. In April 2023, the benefits were raised by 10.1% in line with CPI price inflation

Annex D: Revisions

In 2020 we ditched PDF based statistical summaries in favour of HTML. This enabled us to comply with any legal obligations to make all content fully accessible. The text is now more accessible across a range of different devices.

The 2018 edition underwent moderate methodological changes in order to provide more accurate comparisons between the values of benefits, prices and earnings. Coupled with this, some of the headings were altered in order to provide a clearer explanation of the data being represented. To keep the publication in line with the methodology used by the ONS, we publish median average weekly earnings in addition to mean average weekly earnings in the spreadsheet tables. For the purpose of comparison, the benefit rates as a percentage of both mean and median average earnings have been provided in this publication.

Changes and improvements in methodology made to the 2017 edition meant that previous editions were longer directly comparable. We removed previous publications from the abstract collection page but they are available on request. For more information, please email [email protected]