Warning for millions on benefits set to be worse off for years despite April pay rise – check if you’re affected

MILLIONS on benefits are set to be worse off for years despite being in line for a payment boost in April.

Households will be worse off until 2025 as payments have failed to keep 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.

But 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 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.

This is equivalent to a £500 per year real terms pay cut for the average out-of-work claimant

"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 DWP usually uses September's inflation figures to make the decision on benefit uprating from the following April.

Inflation is what goods and services are worth in a country.

If it is higher, that means everyday essentials such as food are more expensive.

Last April, benefits rose by 3.1% but prices have soared even more since then and payments for this year will rise by 10.1%.

But in periods where the rate of inflation is increasing rapidly, for example between April 2021 and April 2022, the lagged measure of inflation leaves the UK’s 6 million working-age households that receive benefits temporarily short-changed.

A Department for Work and Pensions spokesperson said: "This year we are increasing benefits and the state pension in line with September’s inflation rate of 10.1%, but we recognise the pressures of the rising cost of living, which is why we also delivered £1,200 of direct, targeted support to millions of vulnerable households last year, and will be providing a further £1,350 of support in 2023-24.

"In addition, our Household Support Fund continues to help people with essential costs."

What benefit payments will rise in April?

Both legacy benefits and Universal Credit payments will rise in line with September's inflation rate of 10.1% in April.

The increase is designed to help people keep up with rising prices.

The following benefits will increase in April:

• Universal Credit
• Housing benefit
• Pension credit
• Attendance allowance
• Carer's allowance
• Disability living allowance
• Employment and support allowance
• Job seekers allowance
• Maternity, paternity, adoption and shared paternal pay
• Income support
• State pension

We've previously explained how much these benefit payments will rise by in April.