Millions of retirees and benefit recipients in both the United States and the United Kingdom are awaiting critical updates to their monthly payments, as governments finalize cost-of-living adjustments (COLA) and benefit increases for 2026. With inflation figures now confirmed and statutory mechanisms in motion, households on fixed incomes are bracing for changes that will shape their budgets in the year ahead.
In the U.S., the Social Security Administration is set to announce the official COLA for 2026 on Friday, October 24, 2025, following a delay prompted by the ongoing government shutdown. According to reporting by USA Today, the announcement was originally scheduled for October 15 but had to be pushed back when the September inflation report—the final piece of data needed for the calculation—was postponed. The U.S. Bureau of Labor Statistics confirmed that the September inflation data, crucial for determining the COLA, would be released at 8:30 a.m. ET on October 24, allowing the Social Security Administration to meet its statutory deadlines for accurate and timely benefit payments.
For the nearly 75 million Americans who rely on Social Security—including retirees, disabled individuals, and children—the annual COLA is more than a bureaucratic detail. It directly affects their quality of life. The Senior Citizens League, an advocacy group for older Americans, has predicted a 2.7% COLA for 2026 based on its analysis of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as well as national unemployment and Federal Reserve interest rates. "Seniors across America are holding their breath as we wait for the official COLA announcement in October," said Shannon Benton, Executive Director of the Senior Citizens League, in a statement to USA Today. "Our research shows 39 percent of seniors depend on their benefits for all their income, so the COLA announcement has a direct effect on their quality of life."
If the 2.7% increase is confirmed, the average Social Security recipient will see their monthly check rise by more than $50 starting in January 2026. Last year’s COLA was 2.5%, while the highest adjustment in recent memory was a staggering 8.7% in 2023—the largest since 1981. Over the past two decades, the average COLA has been about 2.6%, underscoring just how variable these adjustments can be depending on economic conditions.
The COLA is calculated based on the average annual increases in the CPI-W from July through September. However, the delay in the September inflation report due to the government shutdown created uncertainty and anxiety for beneficiaries. There has also been ongoing debate in recent years about whether the COLA should instead be calculated using the CPI-E, which better reflects the spending patterns of the elderly, particularly for health care and medicine costs. But for now, the CPI-W remains the standard.
Across the Atlantic, the United Kingdom faces its own set of challenges—and a similar sense of anticipation. The Office for National Statistics (ONS) confirmed that UK inflation remained unchanged at 3.8% in September 2025, the same rate as in August. This figure is especially consequential, as it is typically used to determine how much the State Pension and many welfare benefits will rise in April 2026.
According to the Manchester Evening News and Mirror, transport costs—particularly petrol and airfare—were the main drivers keeping inflation steady. Meanwhile, prices for food, non-alcoholic drinks, and live event tickets actually fell. Grant Fitzner, ONS Chief Economist, explained, "A variety of price movements meant inflation was unchanged overall in September. The largest upwards drivers came from petrol prices and airfares, where the fall in prices eased in comparison to last year. The were offset by lower prices for a range of recreational and cultural purchases including live events. The cost of food and non-alcoholic drinks also fell for the first time since May last year."
The UK’s so-called "triple lock" system ensures that the State Pension increases each April by whichever is highest: earnings growth between May and July, September inflation, or 2.5%. This year, wage growth from May to July 2025 was 4.8%, outpacing September’s inflation rate. As a result, the State Pension is expected to rise by 4.8% in April 2026. For those receiving the full new State Pension, this means a weekly payment of £241.30, or about £12,548 per year. Recipients of the full basic State Pension could see their weekly payment rise to around £184.90.
Chancellor Rachel Reeves voiced her concerns about the current economic climate, telling the Mirror, "I am not satisfied with these numbers. For too long, our economy has felt stuck, with people feeling like they are putting in more and getting less out. That needs to change. All of us in government are responsible for supporting the Bank of England in bringing inflation down. I am determined to ensure we support people struggling with higher bills and the cost of living challenges, deliver economic growth and build an economy that works for, and rewards, working people."
Benefit recipients in the UK are also set for increases. As reported by The Mirror, the Department for Work and Pensions (DWP) is legally required to increase nine core benefits in line with inflation each April, including Personal Independence Payment (PIP), Disability Living Allowance, Attendance Allowance, and others. The September inflation figure of 3.8% will likely be used to determine the increase for these benefits in April 2026. Universal Credit, the UK’s flagship welfare program, will see its standard allowance rise by the September inflation rate plus an additional 2.3%, bringing it from £92 to £98 per week for singles and from £145 to £154 per week for couples. However, the "limited capability for work-related activity" element will decrease for most new claimants with long-term health conditions or disabilities.
The increases come at a significant cost to the UK government. The Office for Budget Responsibility estimated that the total welfare bill next year will rise by about £18 billion—£7.6 billion for the State Pension and £8.4 billion for other benefits. Higher-than-expected inflation could add £500 million to the pensions bill and £1.3 billion to other benefits, according to the Institute for Fiscal Studies.
Charities and advocacy groups have weighed in on the changes as well. Anna Stevenson, a benefits expert at Turn2us, told The Mirror that while the increase in Universal Credit’s standard allowance is "a step in the right direction, it comes after decades of erosion." She added, "Many households will still struggle to meet basic costs because rents, childcare and energy have risen far faster." The Resolution Foundation noted that the real-terms value of the standard allowance has fallen by 10% since 2012/13 due to inflation outpacing benefit adjustments.
As both the U.S. and UK finalize their annual benefit increases, recipients are left to weigh the impact of these adjustments against rising living costs. While the mechanisms for calculation differ, the underlying story is the same: millions depend on these decisions to make ends meet. The coming months will reveal whether these increases are enough to keep pace with the relentless march of inflation and changing economic realities.