The government’s extra £1,200 payment to the poorest households this year will not be enough to offset the financial pressures they face, according to a new analysis. Between October 2021 and October 2022, families are expected to suffer three significant blows to their income that far outweigh the payout.
The cost-of-living crisis is hitting poor families hardest due to several factors: the scrapping of the £20-a-week Universal Credit uplift, benefit increases that lag behind soaring inflation, and a sharp hike in the energy price cap. Together, these challenges leave struggling families unable to close the growing financial gap.
Former Prime Minister Gordon Brown, who commissioned the report, has sounded the alarm over the government’s flat-rate payments. He highlights that these payments fail to consider different household needs and sizes, causing serious losses even among the richest households. For example, couples with three children are losing almost as much from rising prices as they did from last year’s benefit cut. An unemployed couple with two children faces losses nearing £1,300, which rises to £1,600 when accounting for the disproportionate impact of inflation on poorer families.
The report notes that the rise in the energy price cap could account for £800 of these costs, with the possibility of further increases.
It also points out that the official benefit increase in April 2022 was just 3.1%, significantly lower than the 9% rise in Consumer Prices Index inflation over the previous year.
Gordon Brown emphasized the urgency of government intervention, stating, “It is the next prime minister’s urgent task to ensure that families have enough to live on, through this crisis and beyond. This paper outlines the gap the government must close before another wave of rising costs overwhelms people.”
The report was authored by Professor Donald Hirsch of Loughborough University and supported by 56 groups, including charities and faith organisations. Isabel Hughes from the Food Foundation described the findings as “alarming” and called for immediate support measures.
Hughes said, “There is now a very serious shortfall in support for families most in need. Expanding free school meals to millions more poor children is crucial. A hot, nutritious meal is the fastest way to stop an under-nutrition crisis that could devastate a generation’s education, health, and future.”
The report delivers a stark warning that without tailored support, millions of struggling UK families risk being left behind as the cost-of-living crisis deepens.
Originally published by UKNIP.
