People on benefits will still struggle to afford basic essentials despite an above-inflation rise from April next year, experts have warned. The September inflation rate of 3.8%, announced on Wednesday, is typically used to decide benefit increases including Universal Credit, tax credits and disability benefits.
Universal Credit will see a 2.3% rise in the standard allowance rate from next April under the Universal Credit Act 2025. Combined with September's inflation rate, this creates a total uplift of around 6.2% next year.
Persistent affordability gap
The Joseph Rowntree Foundation said its calculations show the basic benefits rate "bears no relationship to the cost of essentials". The UC standard allowance will rise from £92 to £98 per week for singles and from £145 to £154 per week for couples.
However, JRF calculates that a single person currently needs at least £120 per week to afford essentials, while couples need at least £205. This leaves singles facing an annual gap of at least £1,000, while couples face around £2,500 shortfall.
Expert criticism grows
Chris Belfield, chief economist at JRF, said the majority of people on Universal Credit cannot afford essentials like food, heating and basic toiletries. "It's not enough to tweak the system each year if the result is still far from a level people should be able to expect if they need support in hard times," he said.
Iain Porter, a senior policy adviser at JRF, called for an independent process to recommend rates reflecting actual costs. "Instead of simply uprating last year's arbitrary amount each year, we need an independent process to recommend rates that reflect what people need to at least afford essentials," he said.
Charity concerns persist
Anna Stevenson from the Turn2us charity said while raising UC above inflation is "a step in the right direction", it follows "decades of erosion". She noted that around 40% of people using their benefits calculator say they cannot afford food.
The charity highlighted that more than 600,000 households on transitional protection will see no increase at all because their payments are frozen in cash terms. Turn2us supports proposals for an Essentials Guarantee to set a legal minimum ensuring Universal Credit covers basics like food, heating and rent.
Government response
A Department of Work and Pensions spokesperson said the government is "shifting our focus from welfare to work, skills, and opportunities". They emphasised sustaining the main Universal Credit rate above inflation for the first time and rebalancing rates "to reduce the perverse incentives that encourage ill health".
Sources used: "PA Media" Note: This article has been created with Artificial Intelligence (AI).
