Universal Credit payments could INCREASE as part of Rishi Sunak’s cost of living rescue plan

MILLIONS of people on Universal Credit could see their payments increase under plans being considered by the government.

Rishi Sunak is working on plans to rescue struggling households from the cost of living crisis.

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The chancellor is expected to make an announcement tomorrow offering more help with energy bills.

It comes as the regulator Ofgem warned that the price cap could rise by another £800 in October, taking the average dual fuel bill to £2,800 a year.

One option reportedly being considered is an increase to Universal Credit payments in line with inflation now rather than Spring next year, the Telegraph reports.

Inflation is currently 9% and a rise last month to benefit payments was just 3.1%, squeezing millions of people’s finances.

Rishi’s right-hand-man at the Treasury on Sunday fuelled hopes of more support over the weekend.

Asked specifically on extra help, Treasury minister Simon Clarke would not rule anything out and said “all options are on the table”.

But there’s no guarantee there will be a rise to Universal Credit, and it is just one of the options being considered to help ease the pain of major price rises hitting households.

The government has also not confirmed when an announcement will be made.

Universal Credit usually rises annually in April along with other benefits based on the inflation rate for the previous November.

Another option being considered is an increase to the Warm Home Discount from £150 to £500.

The existing scheme offers the cash to pensioners and those on low incomes over the winter months.

A windfall tax on energy firms is also being considered to fund the extra help for millions of homes.

Also mooted are a temporary cut to VAT on energy bills, but the government has previously distanced itself from such a move.

Other potential measures could include a cut in council tax, further council tax rebate, and an increase in the winter fuel allowance, a payment to help pensioners heat their homes in winter.

The government announced help for households back in February, including the £150 council tax energy rebate for four in five households.

There will be a £200 discount applied to every energy bill in October, which will have to be repaid over five years.

The Household Support Fund has also been doubled to £1billion, and this gives money to local councils to dish out to struggling residents in their area.

Cost of living crisis deepens

But the cost of living crisis has deepened since then and there are widespread calls to give more help to families struggling to get by.

The boss of one of Britain’s biggest energy companies warned the cost-of-living crisis could endure for more than a year and a half.

The energy price cap limiting how much suppliers can charge for standard tariffs shot up by 54% in April pushing up bills for millions of people.

Around 22million households are currently on price capped tariffs as fixed deals are now far higher following a steep increase in wholesale energy costs since last year.

The price cap increase pushed the typical duel fuel bill from £1,277 to £1,971, though exactly how much you pay depends on usage.

That could rise again to £2,800 in October when the second of two annual reviews of the price cap take place, pushing even more people into financial difficulty.

Wholesale energy costs are going up due to global supply issues and the war in Ukraine.

While the price cap prevents these increase being passed on to consumers immediately, the price cap is based on the wholesale costs when it’s reviewed creating a “shock” rise twice a year when they go up.

Ofgem is considering more regular reviews of the cap to spread out rises, and pass on any falls earlier.

Meanwhile other costs have gone up ranging from food to fuel, piling pressure on people’s finances.

Petrol prices  have hit record highs in recent months while the price of some basic food items have shot up by as much as 60%.

One mum told The Sun how she worries that she won’t be able to feed her kids or keep her fridge running due to soaring energy bills.

And a hard-working mum of two on Universal Credit and with a full-time job can no longer afford food or activities for her daughter.

Here’s all the help you can get if you’re on Universal Credit and struggling to get by.

This post first appeared on thesun.co.uk