Families on Universal Credit Face Potential Cuts as Tories Question Benefit Increases
The potential cuts to Universal Credit benefits have raised concerns for low-income working families in the UK.
In a time of economic uncertainty, the potential for cuts to Universal Credit (UC) benefits in Lincolnshire and the UK has raised concerns for low-income working families.
At a time when families in Lincolnshire including Scunthorpe, Lincoln, Grimsby, Skegness, and Boston are struggling, the government’s hesitation to increase payments in line with inflation has sparked fears.
With the cost of living on the rise, families relying on UC could miss out on up to £1,200 per year, according to a recent analysis by the Resolution Foundation.
Treasury minister Andrew Griffith has cast doubt on whether UC payments will increase in April next year, stating that the decision is “yet to happen” and that “no promises” can be made regarding spending and taxes.
This uncertainty has left many families on edge, as inflation remains unchanged at 6.7% in the 12 months leading up to September. These inflation figures are typically used to calculate the increase in benefit payments for the following year.
The Resolution Foundation’s analysis reveals that approximately nine million families could be worse off by an average of £460 per year if UC and other working-age benefits are frozen.
For a low-income working family with two children, this freeze could result in a loss of £1,200 annually. James Smith, a representative from the Resolution Foundation, warns that “families across Britain will pay a heavy price” as a result of these potential benefit cuts.
Multiple charities and advocacy groups have voiced their concerns over the potential cuts to UC benefits. Save the Children UK, the Trussell Trust, and the Children’s Society have written to Tory MPs, urging them to ensure that benefits rise in line with September’s inflation figures.
They highlight the possible consequences of even a small difference in benefit increases, such as families falling into debt, parents having to compromise on healthy food, and children missing out on essential developmental experiences.
Despite these pleas, the government has refused to guarantee that benefits will rise in line with inflation.
The Prime Minister’s official spokesperson stated that the Secretary of State must conduct the statutory annual review of benefits and state pensions using the most recent data, including the latest inflation figures1. This process will determine the fate of benefit increases, leaving families in suspense.
In addition to the potential cuts to UC benefits, Chancellor Jeremy Hunt is considering adjustments to the pension triple lock.
The triple lock ensures that the state pension increases each year by whichever is higher: inflation, average pay, or 2.5%1. The proposed changes could result in those on the new state pension being £75.40 per year worse off in real terms.
The Department for Work and Pensions has defended its position, stating that benefits were increased by over 10% in 2023 to protect the most vulnerable from the impact of high inflation. However, the uncertainty surrounding benefit increases for the upcoming year remains, as the Secretary of State conducts the annual review using the most recent data.