Millions on Universal Credit and benefits set to lose up to £716 a year – full list of jobs affected
THOUSANDS of low-income workers could lose up to £716 a year if benefits don't rise in line with inflation.
Official figures released today show prices are rising at a rate of 10.1% thanks to soaring food and energy costs.
Inflation is a measure of how the price of goods and services have changed over the past year.
And for many years benefits have been raised each April in line with the previous year's September inflation figures, so that payments keep up with rising costs.
But the government has failed to commit to the annual uprating of benefits in line with prices.
Instead, it’s thought that ministers could use wage growth, which is currently 5.4%.
READ MORE IN MONEY
If payments increase by less than inflation it leaves people's incomes squeezed and worse of in real terms.
A typical working family with two kids earning less than £24,700 a year is set to lose up to £716 a year if the lower earnings figure is used.
The figures from the Child Poverty Action Group (CPAG) take into account savings from a reduction in National Insurance from November 6.
Without the cut it would leave working families £752 worse off.
Most read in Money
The amount people could miss out on depends on how much their Universal Credit or benefit payment are.
For instance based just on the standard allowance of Universal Credit, a single person over 25 would be £15 worse off per month and £180 worse off per year.
This is because their standard monthly allowance would increase from £335 now to £353 in April based on earnings, instead of £368 with inflation.
A couple over 25 with children currently get £1,015 a month. They would be £44 worse off per month, or £528 per year.
But the real impact will be much greater as lots of other vital top-up payments are affected.
Many people on Universal Credit are in work, but face a hit of hundreds of pounds a year without a rise to payments with inflation.
Hairdressers are set to lose £716, while van drivers could be £622 worse off, according to the numbers crunched by CPAG.
The figures, based on average earnings for each profession, show hospital porters are set to be £637 worse off and shop workers down £671.
- Waiters and waitresses - £707
- Teaching assistants - £686
- Nursery nurses - £685
- Pharmacy assistants £679
- Retail cashiers - £671
- Receptionists - £667
- Chefs - £653
- Street cleaners - £651
- Care workers - £649
- Hospital porters - £637
- Van Drivers - £622
- Security guards - £588
- Postal workers - £563
The calculations are based on a family with two young children where one adult works full time and they live in rented housing.
For families with greater needs like having a disabled child and one of the adults a carer, they could be left over £1,000 worse off.
Alison Garnham, boss of the CPAG said: "The bare minimum government can do is to confirm it will raise benefits in line with inflation.
"With so much uncertainty and fear, families are terrified, and it’s unthinkable that children will be forced to bear the brunt of the government’s economic mistakes."
Director of policy and campaigns at Action for Children, Imran Hussain, said: "A cut in the true value of benefits would cause immense long-term damage to so many of the low-income parents and children we support who are already struggling to survive on the breadline."
The government has not confirmed if it will increase benefits with inflation, creating uncertainty for many of the most hard-up households.
An announcement is expected on October 31 when the new Chancellor Jeremy Hunt will make a Budget speech.
The Prime Minister Liz Truss today committed to an in increase to state pension payments in line with inflation under the triple lock.
What's happening with inflation?
The UK’s rate of inflation hit 10.1% in September driven by soaring food and energy prices.
It comes after inflation temporarily fell in August to 9.9%, but with levels at 10.1%, inflation is now back at a 40-year high.
Rising food prices were the major factor which drove inflation up between August and September 2022.
Food and non-alcoholic beverage prices rose by 14.6% in the 12 months to September 2022, up from 13.1% in August.
The current rate is estimated to be the highest since April 1980.
Read More on The Sun
Read More on The Sun
But the continued fall in the price of motor fuels has helped keep inflation lower than it if prices remained high, according to the ONS.
The BoE now predicts that inflation will peak at 11% in October and then remain above 10% for a few months after.