Why we're urging the government to raise benefits
Charities are coming together to warn the government that benefits must rise as normal in the spring. Our Campaigns Manager, explains what a below-inflation increase would mean for children.
Next week, the Chancellor Jeremy Hunt will be delivering the Autumn Statement. We’re alarmed by rumours the government will slash the spending power of low-income families by not increasing benefits in line with inflation in the usual way (a ‘real-terms’ cut).
The normal practice is that the government raises benefits in line with inflation each April, based on the level of inflation at the previous September. But the Chancellor has been dropping hints that he's looking to make cuts. Not increasing benefits levels at all or increasing them by less than inflation – would be a disaster for families. As a society, we shouldn't be looking to cut budgets by taking from the worst off – especially when the long term social and economic effects of poverty are so clear and significant.
Across the UK, too many children are facing financial hardship, but you could help.
Increasing benefits by inflation each year is necessary to ensure they maintain their value as prices rise. The cost-of-living crisis of the last two years has seen prices soar. Previous cuts and policies like the Two Child Limit and Benefit Cap have eroded the value of benefits, they're not enough to meet many families’ needs, leaving them exposed to rising prices. For many low-income families, this has meant being unable to afford the essentials, getting into debt, relying on food banks or emergency support like our Crisis Fund.
What is inflation?
Inflation means that prices for goods and services are rising. The inflation rate refers to how quickly prices are rising over time. The headline figure that gets reported in the news is an average across the population – but price rises are not felt equally. Poorer households are hit the hardest by high inflation, as they spend more of their budget on things that have seen the highest price rises, like food and energy. And falling inflation doesn’t mean falling prices – it simply means prices are rising more slowly.
In the run up to an election, Rishi Sunak may want to present the government as ‘tough but fair’. But the government can’t return to old divisive narratives about ‘strivers’ versus ‘shirkers’. It risks missing two crucial points:
- Work isn’t an easy answer to poverty: 71% of children living in poverty are in working households. Our All Worked Out? report revealed that almost 2 million children in poverty are in families with at least one significant potential barrier to work. That includes 440,000 children whose families already work full-time. The government should focus on what it can do to help families overcome these barriers.
- Our social security system is there for all: circumstances can change with no warning. A job loss, illness or injury, bereavement, or new caring responsibilities – all these can push people who are secure into hardship.
Families with children are far more likely to be hit by some of the worst consequences of the cost-of-living crisis. Our recent analysis, ‘A cost of children crisis?’, shows that they are three times as likely to be behind on bills, and twice as likely to miss multiple meals, compared to families without children.
The rate of inflation in September 2023 was 6.7%. This is the bare minimum amount by which benefits should be raised in April 2024. This will protect children and their families from some of the bite of rising prices – but even then, it won’t fully close the gap.
According to the Joseph Rowntree Foundation, children are more likely to be in poverty than any other group – they would be directly harmed by a real-terms cut in benefits. A full benefits freeze would push hundreds of thousands more into poverty. Long after people have stopped talking about the cost-of-living-crisis, its impact will still be felt by those whose childhoods were marked by it.
Use our tool to discover the facts about child poverty and hardship in your local area, then take a few quick steps to share it with your MP.
Across the UK, too many children are facing financial hardship, but you could help.
