The state pension will jump by 3.9 percent which means people entitled to the "new state pension" will receive £175.20 per week and be £344 a year better off. The full rate of the new state pension will increase by £6.60 per week from £168.60. Meanwhile, the basic state pension will rise by £5.05 per week from £129.20 - meaning that in April it will be £1,900 more in cash terms than in 2010. Disability benefits and carers allowance will increase by 1.7 percent next year.
Millions of people of working age will also see their income boosted with the freeze on a host of benefits coming to an end. Working age benefits are expected to rise by 1.7 percent in April.
Benefits affected include jobseeker's allowance, employment and support allowance, income support, housing benefit, universal credit, child tax credits, working tax credits and child benefit.
Secretary of State for Work and Pensions Therese Coffey said: "We're clear the best way for people to improve their lives is through work, but we know some people require additional support.
"Our balanced fiscal approach has built a strong economy, with 3.6 million more people in work since 2010. And it's that strong economy which allows us to bolster the welfare safety net by increasing benefit payments for working-age claimants now."
According to her department, there are now 500,000 fewer children living in longterm workless households than in 2010 - a fall of approximately one third.
It claims that people in lower-paid occupations have seen the biggest pay growth, with weekly earnings for factory workers and those in similar roles rising by 8.8 percent in the past five years.
Frank Field, chairman of the Work and Pensions Committee (Image: Julian Hamilton/Daily Mirror)
Her department also boasts of a "record rate of single parents in work," with nine in 10 children now growing up in a household with at least one adult in work.