Gains from the cut in national insurance (NI) for low-income families could be dwarfed by inflation if the Government decides to raise benefits in line with wages rather than inflation. According to research from Child Poverty Action Group and Action for Children, a family with two children earning less than £24,700 will lose out by more than £600 in 2023/24 if benefits are increased in line with earnings.
This is because earnings have increased by 5.5%, while last month’s Consumer Price Index (CPI) inflation rate is expected to be between 10-10.1% when it is announced on Wednesday. If the Government decides to uprate benefits by inflation, then it will be increased by between 10-10.1%, coming into effect from next April.
According to figures from the group, a teaching assistant with average earnings of £17,789 will gain just £65 from the NI cut, but their two-child family will lose £752 if their benefits do not rise in line with inflation. Among the professions that would be hit hardest by a failure to raise benefits in line with inflation include care workers, hospital porters, postal workers, and street cleaners.
