The move will see 150,000 people receiving £400 more each year with those eligible for the disability premium gaining an additional £510 per year.

Minister of state for care, Stephen Kinnock, said: ‘We are determined to not only reform adult social care but do it in a way that helps some of the most vulnerable people in society with the daily pressures they face.

‘From April, more than 150,000 disabled adults will keep hundreds of pounds more each year - putting extra money back into their pockets to help with everyday costs.

‘At the same time, we are putting more money into funding life-changing home adaptations so older and disabled people can live safely and independently.

‘These steps are part of our wider plans to build a national care service rooted in quality, fairness and dignity for all that use it.'

The Government also confirmed £723m for the Disabled Facilities Grant (DFG) next year to help older and disabled people adapt their homes so they can live safely and independently. The DFG supported around 60,000 people last year and it helps keep people out of hospital and living comfortably in their own homes.

Jon Sparkes, chief executive of Mencap, said the inflation-busting 7% was a ‘welcome step in the right direction'.

The 2026 to 2027 DFG allocations are: North East £40,991,139; North West £124,356,177; Yorkshire and the Humber £69,779,658; East Midlands £51,658,126; West Midlands £89,602,528; East of England £66,019,956; London £95,935,564; South East £115,148,496; and South West £69,508,356.