More than 820,000 people on Universal Credit expected to miss out on new £900 cost of living payment

dailyrecord.co.uk:

A think-tank has warned many people on benefits will be financially worse off until 2025 due to a failure in payments keeping up with inflation.

The Institute for Fiscal Studies (IFS) said the annual uprating of benefits in April will “merely take them back to around the real level they were at a year earlier”.The organisation said hundreds of thousands of people could be better off if they earned less due to the way the UK Government’s cost of living payments will work, adding that more money is being spent overall than if benefits had been raised in line with inflation.The IFS said real benefit rates were 7.6% lower in 2022 compared with their pre-pandemic levels in 2019, and will be 6.2% lower in 2023 and 2.0% lower in 2024.In a report released on Wednesday, it said: “Astonishingly, it is not until April 2025 that benefit rates are set to recover the ground they lost over the autumn and winter of 2021 due to lags in uprating them with inflation.”The lowest-income households are almost three times as exposed to energy costs as the highest-income households, the institute said.Report author Sam Ray-Chaudhuri described the cost of living payments as a “crude patch” which is “no substitute” for fixing the problem at source.Such payments, despite trying to “plug the gap” will “actually result in the government spending around £2 billion more on recipients of means-tested or disability benefits” in the next financial year than it would have had to if it had raised ordinary benefits in line with current inflation, the IFS said.While childless families with no-one in paid work and on Universal Credit “tend to do especially well out of the crude, flat-rate arrangement”, almost half of all families with three or more children