The Government’s support package will be more than wiped out by the ballooning cost of living, new analysis from the Joseph Rowntree Foundation has found, making the case for doubling the amount to protect the hardest-hit through the winter.
The Bank of England forecasts that CPI inflation could rise to 13% by the end of 2022 and remain high through a year-long recession. JRF’s analysis used this to calculate the impact rising living costs will have on low-income families.
Energy bills will be £1,550 dearer on average by April 2023 than the same time this year. On top of this, the price of food and other examples of everyday spending will rise on average by £1,000 through inflation. Combined, this leaves a low-income family £2,550 worse off.
The Government pledged £1,200 to be paid in lump sums to help low-income working-age families but the gloomy economic outlook means this needs to be at least doubled to help families get through the winter.
Katie Schmuecker, Principle Policy Advisor at the Joseph Rowntree Foundation, said:
“A lot has changed since the Government announced it would step in to stop families falling prey to runaway gas and electricity bills. The Bank of England is telling us high inflation will be with us for at least the next couple of years, and its Governor conceded the least well-off will be hit hardest. This won’t just increase prices for the most vulnerable. It means their benefits payments are worth less because they aren’t uprated at the same pace as soaring inflation.
“The Government can’t sit idly by while millions of families forego basic essentials in an attempt to meet astronomical living costs that are outside their control. Even before this unprecedented winter, low-income families had little breathing space because social security has been subject to cuts and freezes for over a decade.
“The Government must now step up and at least double the support paid to those most in need, to prevent a difficult winter becoming
