UC families face £660 income cut as Bank of England increases inflation expectations

Published on: 
21 March 2022

In a letter to the chancellor last week, the Bank of England stated that it expected inflation to be “around 8 per cent” this spring. With UC set to rise by just 3.1 per cent in April, families with children on universal credit now face a real-terms cut of around £660 per year, on average. This is an increase on Child Poverty Action Group’s original analysis which showed a cut of £570, when inflation was expected to be 7.25 per cent.

The £20 cut to universal credit last October plunged out-of-work benefits to their lowest level in 30 years. Today’s analysis shows that the picture for families is going from bad to worse. Without government action, families will be pulled deeper into poverty. Increasing benefits by anything less than 8 per cent risks pushing those with already stretched budgets past breaking point.

Read our original briefing