Two hundred thousand more children will be pushed into poverty if benefits are uprated by wages rather than inflation, new analysis from Child Poverty Action Group (CPAG) finds. Almost all these children will be in families where at least one parent is working.
CPAG’s analysis also shows that the average increase in prices for 2023/24 compared to 2021/22 is 16% for all households but the inflation rate for low-income families – who must spend a much higher proportion of their income on ever more expensive essentials like energy and food – is 19%.
If benefits only go up with earnings next year, they will have only risen by 9% (3.1% and 5.4%) since 2021/22. This means that low-income households will receive 10% less in social security in real terms than they did two years ago (and even less if the £20 universal credit uplift is taken into account).
Most of these households are working households who will also lose out from earnings going up by less than inflation. Households who are unable to work, due to caring for young children, disabilities or being in between jobs, would be pushed even deeper into poverty. The 10% cut would be the biggest two-year reduction in social security ever – at a time when families are in desperate need of more support.
The prime minister has so far refused to confirm that she will honour the former chancellor’s pledge to increase benefits to match inflation, which is currently running at 10 %.
Commenting on CPAG’s findings, chief executive of the charity Alison Garnham said:
“The UK already faces a child poverty catastrophe, and government will ruin the lives of many more children unless it takes action. Struggling parents need reassurance now that their children are not on the list for efficiency savings. The Chancellor must honour the promise to uprate benefits in line with inflation. U-turning on children’s futures cannot be an option.”
