Struggling families face being £1,600 worse off a year despite government support, report says
07.08.2022 - 10:55
/ manchestereveningnews.co.uk
Government support for low-income households amid the cost-of-living crisis falls short of offsetting the losses they face, with some families up to £1,600 worse off a year, a report has found.
The additional £1,200 offered to the poorest in society this year will fail to compensate for three major blows to their income from October 2021 to October 2022, the analysis suggests. The loss of the £20-a-week benefits uplift, an annual uprating out of line with inflation forecasts, and a jump in the energy cap will mean the worst-off families cannot bridge the gap, it says.
The report, commissioned by former prime minister Gordon Brown, found that the largest families would face the biggest losses. This is because the flat-rate payments offered by the Government fail to take into account the different sizes and needs of different households, it says.
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A couple with three children are losing almost as much again from rising prices as they did from last year’s cut in the Universal Credit uplift, the report says. And the loss for an out-of-work couple with two children is nearly £1,300, or £1,600 if higher inflation for worse-off households is taken into account, according to the report.
This is based on an £800 rise in the energy price cap, and will be higher to the extent that it increases further. An annual uprating in April 2022 of 3.1pc, rather than the 9pc that the Consumer Prices Index had risen over the past year, will add to the cost-of-living pressure, the analysis suggests.
In an introduction to the paper, Mr Brown called on the Government to take “immediate action” to bridge the gap. “It is the urgent task