Universal Credit: DWP benefit payments to rise next month – but not enough to beat inflati | Personal Finance | Finance
However, concerns have been raised that the increase in payment rate will not be enough to combat the UK’s skyrocketing inflation. Earlier today, the Bank of England confirmed that inflation has risen to a new 30-year high of 6.2 percent in the year to February 2022. Despite this shocking hike in inflation, benefit payments from the Department for Work and Pensions (DWP) will not be going up by a similar amount.
From April 2022, inflation-linked benefits will rise by 3.1 percent in line with the Consumer Price Index (CPI) inflation rate from September 2021.
Today, the Chancellor Rishi Sunak is issuing his Spring Statement and offering the Government’s Budget changes for 2022.
Many are hoping for an announcement regarding a potential uplift to benefit payments from the Chancellor to address the rising cost of living.
Previously, during the pandemic, the Government provided a £20 uplift to Universal Credit payments to assist struggling households.
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In light of the pending 3.1 percent rise to Universal Credit, the DWP benefit payment will:
Increase from £257.33 to £265.31 for people who are single and aged under 25
Increase from £324.84 to £334.91 for people who are single and aged 25 or over
Increase from £403.93 to £416.45 for couples who are both under 24
Increase from £509.91 to £525.72 for joint claimants where one, or both, are 25 older
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Imran Hussain, director of policy and campaigns at Action for Children, outlined what is at stake for many families which rely on vital benefits, such as Universal Credit.
Mr Hussain said: “Many of the families we work with saw their financial situation destabilised by the pandemic, and now this is being compounded by a dramatic rise in energy bills and food prices, which are only going to get worse with the war in Ukraine and a rise in inflation.
“We’re urging the Treasury to honour their ‘build back better’ agenda by prioritising practical support for those of us on low incomes, this must include increasing the value of benefits to keep up with surging inflation.”
Dan Paskins, the director of UK Impact at Save the Children, emphasised that benefit payments need to be raised in line with, or at least close to, the rate of inflation for households to make ends meet.
He explained: “For months, parents have been telling us that rising prices are making life almost unbearable.
“Although they’re doing all they can to shield their children from the impacts, these families are running out of options. They need the chancellor to step in and help.
“Tweaks to fuel duty or National Insurance won’t be enough. Already, we’re hearing that children are going without meals so that the heating can stay on or feeling hungry at school because the food budget is spread so thin.
“The Chancellor must not allow children to bear the brunt of the current crisis. Families need direct support through the social security system, starting with a benefits increase of at least seven percent to match the rate at which prices are increasing.
“Anything less will spell another real-terms cut to families’ incomes and children will pay the price.”
Prior to Rishi Sunak’s Spring Statement today, Jack Leslie, the senior economist at the Resolution Foundation, added: “Another sharp rise in inflation last month offers a foretaste of the huge income squeeze coming this year, with inflation likely to hit at least 8 per cent this spring – which could be the highest it’s been in 40 years – along with a second spike this autumn.
“This prolonged period of high inflation – which millions of people have simply never experienced before – is a complete disaster for living standards.
“It will mean pay packets continuing to shrink, along with vital income support such as Universal Credit and the state pension.
“The Chancellor will need to set out a bold response to this cost of living crisis in his Spring Statement today, starting with ensuring that benefits keep pace with inflation over the coming 12 months, rather than shrink by £10billion as they are currently on course to do.”
A spokesperson for the Department for Work and Pensions said: “We know this has been a challenging time for many people, which is why we’re providing support worth around £12billion this financial year and next, to help households with the cost of living.
“This includes putting an average of £1,000 more per year into the pockets of working families via changes to Universal Credit and boosting the minimum wage by more than £1000 a year for full-time workers.”
