Benefits will be uprated by just 3.1% today, despite inflation expected to be around 7.7% this month, with the Bank of England warning that it could reach even higher towards the end of the year.
Today sees the biggest plunge in the value of UK benefits in 50 years, amid the cost of living crisis that will push a further 1.3 million people in the UK into absolute poverty next year.
Benefits will be uprated by just 3.1% today, despite inflation expected to be around 7.7% this month, with the Bank of England warning that it could reach even higher towards the end of the year.
Chancellor Rishi Sunak had been urged by charities and campaigners to increase benefits in line with inflation amid the cost of living crisis, with 500,000 more children expected to be in absolute poverty as a result of his refusal to offer more help to families following his Spring statement, according to the IFS.
New analysis from the Joseph Rowntree Foundation shows that today marks the greatest fall in the value of the basic rate of out-of-work benefit in fifty years. The charity also highlights that for eight of the ten benefit level changes between 2013 and 2022, the basic rate of unemployment benefits has lost value, leaving it at a 35-year low in real terms.
Peter Matejic, Deputy Director for Evidence & Impact at JRF said: “With living costs predicted to rise further this year, it is difficult to comprehend the logic behind a choice not to act to protect the value of benefits, thereby imposing the single biggest benefit cut of its kind in fifty years. The government has chosen to weaken the incomes of the poorest at the worst possible moment.
“A decade of cuts and freezes to benefits have left many people in our society in increasingly desperate situations, struggling to afford food, energy and basic hygiene products. Without urgent action from the government, the stark reality is that the situation could get much worse. The government must, at a minimum, ensure that benefit rises match the real rise in living costs as an immediate first step to protect people from hardship.
“Beyond this, the government needs to further strengthen our social security system, which was already woefully inadequate even before the cost of essentials began to shoot up.”
Official figures have shown that 400,000 children were lifted out of poverty by the £20 uplift to Universal Credit, which the government later scrapped.
Jonathan Ashworth, the shadow work and pensions secretary, told the Guardian that Sunak had imposed the deepest real-terms cut to the state pension in 50 years and a second deep cut to universal credit in six months.
“These severe real term cuts are a direct consequence of his point-blank refusal to take into account current price rises in setting rates,” he said.
“His decision will help push an extra 1.3 million people, including 500,000 children, into absolute poverty. It’s now clearer than ever that the working people, disabled people and pensioners are worse off under the Tories.”
Basit Mahmood is editor of Left Foot Forward
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