“The reality is millions of families can’t afford enough food this week, or to turn the heating on as the nights get colder – emphasised by the fact that food price inflation has risen for the first time since early last year.”
The Joseph Rowntree Foundation estimates that universal credit falls short by around £120 every month of the money people need to afford the essentials.
Alongside Trussell and the Big Issue, the charity has consistently called for an ‘essentials guarantee’ to be implemented in universal credit – so that benefit claimants can afford the basics they need to survive at the least.
“The basic rate of universal credit is so insufficient it fails to protect families from hardship, and this increase will barely touch the sides. The budget must contain urgent measures to support families who are going without essentials,” Porter added.
Porter said that an “immediate and low-cost way to improve the situation is to bring a minimum floor into universal credit to stop already inadequate payments becoming even more inadequate”.
Campaigners have also pointed out that the low inflation rate does not mean prices are going down – they are still rising, just at a slower rate, after years of a cost of living crisis which has left people with nothing left to sacrifice.
Megan Davies from the Stop the Squeeze campaign said: “Lower inflation means nothing to those heading into the winter with cold homes and empty cupboards. We know that the price of essentials like energy, food and rent are still sky high, and that for so many families, the money coming in still isn’t stretching far enough.
“We need a future-proof cost of living plan that gets to the root of the problem, and this budget is a chance for the government to take decisive action. That means boosting incomes, ensuring essentials are affordable, and fixing our broken tax system by bringing in higher taxes on wealth.”
Porter said that “some of the deepest hardship is experienced by people whose universal credit is reduced, for example by debt deductions”.
Half of people on universal credit have money deducted by the Department for Work and Pensions (DWP) from their payments to repay debts and correct errors, as previously reported by the Big Issue. Each household which has money deducted loses an average of £63 a month.
“There must be a line below which a payment cannot fall,” Porter said said. “The government should also take steps to prevent hardship intensifying by permanently linking the help for low-income private renters, called local housing allowance, to rent levels in the area.
‘It must extend funding for local welfare assistance, and scrap the previous government’s planned deep benefit cuts for disabled people too.”
Government ministers have consistently talked about their plans to drive more people with long-term health conditions into work, to bring down the welfare bill and grow the economy.
It is considering changes to the disability benefits system proposed by the Conservatives, with plans in place to tighten the work capability assessment which could see hundreds of thousands miss out on support by 2028/2029.
However, for people who are in work, director of the Work Foundation at Lancaster University Ben Harrison said the latest inflation rate will “come as a relief”. The real value of wages has increased by 1.9% on the previous year.
But he also said that “due to the legacy of high inflation and stagnating pay packets over the last 16 years”, average wages are just £20 a week higher in real terms than they were at the start of the global financial crisis in August 2008.
“This means that despite inflation falling below the Bank of England’s target, workers in low-paid and insecure work are still facing high levels of financial insecurity,” Harrison said.
“As the government approaches its first autumn budget, they must prioritise creating a pathway to a genuine Living Wage in the future, while also ensuring immediate cost of living support such as the Household Support Fund remains available for workers who need it beyond March 2025.”
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