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UK's Reeves to increase spending on benefits in next week's budget, Telegraph reports
Published by Global Banking and Finance Review
Posted on November 18, 2025
1 min readLast updated: January 20, 2026
Home > Headlines > UK's Reeves to increase spending on benefits in next week's budget, Telegraph reports
Quick Summary
Rachel Reeves plans a £6 billion boost in UK benefits spending, with a 3.8% increase for working-age payments. No income tax hike is expected in the 2023 budget.
UK's Rachel Reeves to Boost Benefits Spending in 2023 Budget
LONDON (Reuters) -Britain's finance minister, Rachel Reeves, is set to boost spending on benefits in her annual budget, which will be announced next week, the Telegraph reported on Tuesday.
The newspaper reported that Reeves plans to raise benefits spending by 6 billion pounds ($7.89 billion), with payments for working-age people set to increase by 3.8% starting next April.
The finance ministry did not immediately reply to a request for comment.
The government abandoned money-saving welfare reforms in July, which raised doubts over its willingness to take tough fiscal decisions.
Reeves is expected to need to raise tens of billions of pounds to stay on track to meet her fiscal targets in the budget.
British government borrowing costs surged last week following reports that Reeves, in a significant policy U-turn, no longer plans to raise income tax in her budget due to improved fiscal forecasts.
Investors, businesses and think tanks have said that confusing messages about the budget are undermining the government's credibility.
($1 = 0.7604 pounds)
(Reporting by Catarina Demony; Editing by Leslie Adler)
Key Takeaways
- •Rachel Reeves plans to increase UK benefits spending by £6 billion.
- •Payments for working-age individuals will rise by 3.8% next April.
- •The government previously abandoned welfare reforms in July.
- •Reeves' budget plans no longer include an income tax hike.
- •Conflicting budget messages are affecting government credibility.
Frequently Asked Questions about UK's Reeves to increase spending on benefits in next week's budget, Telegraph reports
1What is the main topic?
The main topic is the planned increase in UK benefits spending by £6 billion in the 2023 budget.
2Why is the benefits spending increase significant?
It marks a shift in fiscal policy, with a 3.8% increase for working-age payments, impacting many citizens.
3What are the implications of no income tax hike?
The decision not to raise income tax may affect government borrowing and fiscal targets.
