Many people on benefits will be worse off until 2025 due to a failure in payments keeping up with inflation, a think tank has 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 Institute for Fiscal Studies (IFS) said.
Hundreds of thousands of people could be better off if they earned less due to the way the Government’s cost-of-living payments will work, the organisation said, adding that more money is being spent overall than if benefits had been raised in line with inflation. 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, the IFS 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," its report said on Wednesday. The lowest-income households are almost three times as exposed to energy costs as the highest-income households, the institute said.
