The Chancellor Jeremy Hunt will confirm the amount by which State Pension and benefits will rise during his Autumn Statement in Parliament this week.

It is not yet known how much pensions and other payments will increase however during interviews this weekend Mr Hunt said he needs to take “difficult decisions” as he considers squeezing welfare payments by billions while slashing inheritance tax. Mr Hunt has also hinted he could unveil tax cuts as he promised an “Autumn Statement for growth” and said now is a “turning point for the economy” after inflation was halved, the Daily Record reports.

Slashing inheritance tax while effectively cutting working-age benefit payments for millions of people would likely draw criticism for supporting the wealthy while society struggles.

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Mr Hunt told BBCs Laura Kuenssberg on Sunday there is “no easy way to reduce the tax burden” and argued: “What we need to do is take difficult decisions to reform the welfare state.”

Typically, the September figure for inflation when uprating working-age benefits, which would mean a 6.7% increase. However, Mr Hunt has not ruled out using October’s far lower figure of 4.6%, which economists say would cut spending by around £3bn.

The savings would largely affect working-age households receiving disability or means-tested benefits, according to the Institute for Fiscal Studies. The Sunday Times reported Mr Hunt and the Prime Minister are weighing up cuts to income tax or national insurance, in a last-minute move to boost growth and their favour with voters.

The newspaper also said they could put off the mooted cut to inheritance tax until the spring budget, to avoid allegations they are lavishing the rich with a handout as many struggle.

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