Nine million households will be an average of £500 worse off next year as benefits rise by less than inflation, shock analysis reveals.
The Joseph Rowntree Foundation says the decision to raise welfare payments by 3.1% - when inflation is forecast to hit 7% - could pull 400,000 more people into poverty.
The Universal Credit standard allowance will rise by £10.07 a month on April 11 to £334.91 for over-25s.
The Pension Credit standard minimum guarantee for a couple is also rising by just £8.40 a week to £278.70.
Both rises were set in line with inflation in Autumn - which has since skyrocketed to 5.5% and climbing.
This will “further erode the value of benefits that are already wholly inadequate”, the JRF said today.
The JRF said around nine million households who claim means-tested benefits due to low incomes will experience an average real-terms cut of £500 per year.
The figure is an average across people both in and out of work who claim Universal Credit, the six legacy benefits it is replacing, and Pension Credit.
Some groups are far worse off than others in this 9million, according to the think tank.
Around 1.8million couples with children who get benefits due to low income will lose out by £720 per year, the JRF said.
The figure across 4.2million pensioner couples is £540 per year.
Low-income families will spend 16% of their incomes after housing costs paying energy bills next year, according to the think tank.
JRF Deputy Director Peter Matejic said: “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 losses outstrip the £350 of help for energy bills provided by the government, £200 of which has to be paid back.
Mr Matejic added: “There can be no justification for this. Our social security system should protect people from harm, not put them in danger.”
A Government spokesperson said: “We know this has been a challenging time for many people, which is why we’re providing support worth around £12bn 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.
“We have also announced a further £9bn to protect against the impact of rising global energy prices and our £500 million household support fund is helping the most vulnerable with essential costs this winter.”
