People claiming Universal Credit and other benefits will effectively see their payments cut this year, as the cost of living continues to soar.
Millions of households will see their incomes outstripped as inflation hits a 30-year high.
The independent Joseph Rowntree Foundation (JRF) warns a planned real-terms cut to benefits in April could plunge hundreds of thousands of people into poverty.
READ MORE: Highway Code rules and rights if someone parks in front of your driveway
Nine million families who receive benefits due to low incomes will be £500 worse off on average due to inflation from April, the foundation said.
Couple families with children in receipt of benefits due to low income will experience a real-terms cut of £720 per year, while the figure across all pensioner couples is £540 per year.
JRF said: "For families on low incomes, a reduction in the value of benefit levels that are already inadequate could not come at a worse time.
"Already, too many families are going without the essentials.
"The price of food and other basic items is rising, and the energy price cap could push the average bill towards around £2,000 from April, leaving many families deeply concerned about how they will manage to stay afloat."
Benefits will rise by 3.1% on April 1, with inflation forecast to hit 7%.
This is described by JRF as a "real-terms cut to the incomes of some of the poorest families in the country at a time when the UK’s main out-of-work support is already at a 30-year low following a decade of cuts and less than six months on from the £20 per week cut to Universal Credit".
Anyone on means-tested benefits will be affected, and these include:
- Housing Benefit
- Income-based Jobseeker's Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Income Support
- Pension Credit
- Child Tax Credit
- Working Tax Credit
- Universal Credit
The JRF is calling on the Government to uprate benefits in line with the Bank of England’s February 2022 Monetary Policy Report forecast of 7% inflation by April as an immediate first step to help keep up with the rising cost of living.
Peter Matejic, Deputy Director of Evidence and Impact at JRF said: “At a time when the case for support could not be clearer, the Government is choosing to further erode the value of benefits that are already wholly inadequate.
“People on the lowest incomes have already experienced a decade of cuts and freezes, followed by an overnight cut of £1,000 last autumn.
"The decision not to uprate benefits in line with inflation represents another cut for millions of people whose incomes will now fall even further behind the cost of living.
“The government must change course and ensure that benefit levels reflect the higher rate of inflation we are all now experiencing. There is no doubt that a failure to do so will leave more people in our society unable to meet their most basic needs.”
Receive newsletters with the latest news, sport and what's on updates from the Liverpool ECHO by signing up here
