Plea for ‘Living Income’ for the poorest

Three-quarters of UK households will see the cost of living outstrip their incomes by the autumn budget, a thinktank’s new study shows.

This equates to about 21 million households, with the poorest 25% seeing their living costs grow at nearly double the pace of their incomes.

The New Economics Foundation (NEF), which carried out the research, is calling on the chancellor and secretary of state for work and pensions to implement long-term reform to ensure Britain’s social security system provides a Living Income.

NEF says reform should include going beyond increasing benefits by inflation in April 2023, instead aligning rates with the cost of living and creating a social security system that is “more responsive to changing bills and ensures people do not live in poverty”.

They also want the benefit cap removed and the two-child limit from Universal Credit and tax credits scrapped.

NEF economist Sam Tims said: “The chancellor finally... listened to calls demanding the government support households struggling with the cost of living.

“These policies still leave three-quarters of households out in the cold and will only last until next year, when inflation and energy bills will still be sky-high.

“Families have been consumed by anxiety, watching bills go up and worrying how they will get through the winter. It doesn’t have to be like this.

“Making permanent changes to our social security system, and a mass programme of home insulation, would stop families having to make impossible decisions.”