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12 October 2022

How benefits payments have failed to keep pace with inflation

The standard monthly welfare payment is now £52 lower in real terms than in 2010.

By Afiq Fitri

Liz Truss has refused to commit to increasing benefits in line with inflation, which means real-terms cuts for millions of people across the UK. The government had previously suggested that benefits would rise after being increased by just 3.1 per cent in April (when inflation already stood at 9 per cent).

But while Truss said that pensions would increase in line with inflation, she claimed on LBC that benefit claimants were in a “different situation” as they were more able to look for jobs. However, 41 per cent of those who receive Universal Credit are in work and many others are disabled or have caring responsibilities.

The value of benefits as a share of earnings has been gradually eroded over the past decade. Between 2013 and 2016, benefits were increased by just 1 per cent and were then frozen altogether for four years. As a result, the standard monthly payment is now £52 lower in real terms than when the Conservatives entered office in 2010.

[See also: Inactivity due to sickness has reached a record high in the UK]

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