POST UPDATED 3rd Dec 2014: the figures quoted in the table below have now been confirmed in the Autumn Statement on 3rd Dec 2014. For a bullet point summary of everything that was announced in the Autumn Statement click HERE.
This morning the Office of National Statistics (ONS) announced the UK inflation figures for September 2014. Now while most people may only pay a passing interest in the monthly inflation announcements, September’s figures actually impact on many people’s lives.
What were September 2014 inflation figures?
Annual inflation in September as measured by the Consumer Prices Index (CPI) fell to at 1.2%. The Retail Prices Index (RPI) measure fell to 2.3% from 2.4% in August.
So why are September’s inflation figures important?
A host of social benefits and tax breaks are increased in line with inflation, as measured by September's figures. The actual increase to benefits takes affect at the start of the next tax year. But inflation is expected to increase again in the coming months which won't be reflected in benefit increases if inflation remains above its current rate come April 2015. The table below summarises the annual increases to key benefits and allowances:
|Type of benefit||Annual increase due in April 2015*|
|Jobseeker's Allowance and other income-related benefits||Usually increased in line Consumer Prices Index (CPI) in September: i.e. 1.2%|
|Disability Living Allowance, Carer's Allowance and other non income-related benefits||Usually increased in line Consumer Prices Index (CPI) in September: i.e. 1.2%|
|State pension||Under the terms of Triple Guarantee the basic state pension is likely to increase by 2.5%. This means an increase from the current £113.10 a week for single pensioners to approximately £115.95*|
|Tax credits||Usually increased in line Consumer Prices Index (CPI) in September: i.e. 1.2%|
|Stocks and Shares ISA allowance||It has not been confirmed whether 2015/16 ISA allowance will definitely increase by Consumer Prices Index (CPI) in September 2014, i.e by 1.2%, given the recent large increase in the annual ISA allowance. Assuming that it does that means a possible increase from the current ISA allowance of £15,000 to a 2015/16 ISA allowance of £15,240. Download your FREE ISA GUDE - including how to save £825 in charges when opening an ISA.|
* these figures were confirmed in the Autumn Statement on 3rd December 2014.