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400,000 people could be pulled into poverty by April real-term cut to benefits

02 March 2022

New analysis by the Joseph Rowntree Foundation (JRF) reveals the stark consequences of the Government’s decision to uprate benefits by just 3.1% in April, when inflation is forecast to hit 7%.

This represents a real-term cut to the incomes of some of the poorest 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.

JRF reports that 400,000 people could be pulled into poverty by real-terms cut to benefits in April and that around nine million households on means-tested benefits, both in and out of work, will experience an average real-terms cut of £500 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.”

As a result, 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: “At the very least, uprating means-tested benefits by 7% would stop this real-terms cut to benefits and protect families on the lowest incomes from the worst impacts of rising costs. But this must go hand in hand with investment in the overall adequacy of social security support, particularly for those who are not in work or are unable to work, whose support is at a 30-year real-term low.”

DR UK’s Welfare Rights and Policy Adviser Ken Butler said: “It’s vital that benefit levels do not fall behind inflation during a cost of living crisis.

“Disabled people are hit hardest by the cost of living crisis. A recent Channel 4 news item highlighted that we are twice as likely to have a cold home and three times as likely to find it hard to pay for food than non-disabled people.

Nearly half of everyone in poverty is either a Disabled person or lives with a Disabled person. Benefits paid to Disabled people are already too low and need to be increased above inflation.”

Note: last month, The Food Foundation published new research highlighting that Disabled people are five times more likely to be at risk from food insecurity (lack of access to adequate food) compared to non-disabled people.

For more information see 400,000 people could be pulled into poverty by real-terms cut to benefits in April available from jrf.org.uk.

See also our news story United call for benefits to increase by 6% from April 2022 due to cost of living crisis.