EXTRA Universal Credit cash should double to match the soaring cost of living next year as families face crippling price rises, a think tank has recommended.
Benefits and pensions are linked to inflation – but the numbers used are from last year before it started soaring.
Most will go up by 3.1 per cent in April, but inflation is set to soar to around six per cent, meaning people will effectively be worse off, according to the respected Institute for Fiscal Studies.
They called for ministers to hike the benefits even further to match soaring rates – and help with the looming cost of living crisis.
On average it would mean 10 million Brits on Universal Credit, other benefits and low incomes may keep up to £300.
Robert Joyce, Deputy Director at the IFS said today: “The way in which we increase benefits each April is not fit for the period of high and rising inflation we now face.
“Benefits are set to rise by 3.1 per cent – last September’s inflation rate. But by April inflation will be about 6 per cent.
“So the poorest are heading for a 3 per cent year-on-year cut in their real benefit levels and living standards.”
They admit it would cost the Chancellor at least an extra £3billion to do, but it would compensate for higher energy costs, and should only be a temporary measure.
And it would cost similar amounts to other options that are being looked at by the Treasury at the moment.
The triple lock is already being suspended for a year to deal with average wages going back up again after the pandemic.
Ministers are currently looking at ways to help protect consumers from soaring energy bills – which are set to hit the poorest hardest.
The energy price cap is expected to rise by hundreds of pounds in April to an eye-watering £2,000 a year, some experts fear.
A VAT cut or slashing green levies are other options on the cards to help people deal with the huge bill hike.
But earlier today Centrica boss Chris O’Shea warned that higher gas prices could last for years.
He said rocketing prices may not come back down “any time soon” and we may be looking at problems for 18 months to two years.