Millions on benefits could get pay rise of up to £504 next year – how much could you get

BENEFITS could rise by as much as £504 a year as the cost of living rockets – but not until next year.

The government has said that if inflation remains high this year, it will be reflected in next year’s benefit rates.

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Speaking in the House of Commons, MP and Treasury Secretary Simon Clarke said: “The welfare system always operates on the basis of an uprating in September for changes in the ensuing April.

“If there is high inflation during the course of 2022, as is forecast,
that will be reflected in the uprating figures for April 2023, and the triple lock will be in place to protect families.”

Inflation is running at 5.5% and is expected to reach higher than 8% this year experts believe.

If it hits that high in September, it could see benefit payments rise by that amount the following April.

That would see Universal Credit rise by as much as £42 a month, or £504 a year.

The current basic amount for couples over 25 of £509.91 a month is going up to £525.72 this April.

An increase of 8% would see that amount go up to around £567.78 in 2023.

Meanwhile the same rise to the maximum new state pension would see retirees get a pay rise of around £770 a year.

But the exact amount of any benefit rise next year will depend, and inflation could still be higher or lower than 8% in the crucial month.

The lag between inflation data for calculating the rise and payments actually increasing means millions on benefits are already feeling the pinch in their pockets.

This year’s rise takes effect from April and is based on inflation for last September which was 3.1%.

The government was urged to increase benefits by more as the cost of living has soared since the increase was announced last November.

Charities, economists and other organisations had called on the Chancellor to act in his Spring Statement.

The Resolution Foundation think tank called for a rise of 8.1% next month that would “merely ensure that the value of benefits keep pace” with the price rises now.

Because prices are rising by more than the increase to benefits, it leaves households worse off in real terms.

Rishi Sunak did not announce any change to benefit rates this year, leaving many disappointed and warnings that hundreds of thousands of families risk falling into poverty.

Mr Sunak did announce an extra £500million of cash for local councils to dish out to those struggling through the Household Support Fund.

This post first appeared on thesun.co.uk