Pensions and benefits are set to rise in line with inflation, while inheritance tax is facing a freeze that would cause a ‘stealth rise', according to reports.
After previously saying that "difficult decisions" had to made, Prime Minister Rishi Sunak faced significant pushback on cutting real benefits by not raising them in line with inflation.
The Times reported the pledges have been sent to the Office for Budget Responsibility to be forecast into the Autumn Budget, which will cost an estimated £11bn next year.
Nevertheless, it is still expected that there will be public spending cuts in other sectors, as new Chancellor Jeremy Hunt aims to approach the budget deficit with a '50:50' approach to cutting spending and raising taxes.
Jeremy Hunt to outline £60bn in tax rises and spending cuts in Autumn Budget - reports
The other significant budgetary news, revealed by the Financial Times, is that through freezing the inheritance tax's ‘nil-rate band', which allows homes to be left to direct descendants for no tax, the chancellor plans to raise at least half a billion pounds.
The move would be part of a broader effort to raise taxes through ‘fiscal drag', by freezing boundaries that were otherwise set to move, rather than having to nominally move tax boundaries.
It has previously been reported that Hunt is looking to reduce the budget deficit by about £60bn, including £35bn of cuts, to bring the share of debt to GDP down to Sunak's previous fiscal targets.
