The consumer prices index rose by 9 per cent in the 12 months to April, meaning that welfare recipients and pensioners face a real-terms cut this year after their payments increased by only 3.1 per cent. Rishi Sunak, the chancellor, said the Treasury would raise the payments in line with inflation next year after previously blaming the government’s computer systems for his inability to provide more immediate support.
Benefit claimants and pensioners are set to receive the biggest rise in their incomes since 1991 in a move that will cost the Treasury £15 billion next year. The sum will keep benefit payments and pensions in line with inflation.
The Resolution Foundation, an independent think tank, has calculated that the cost would be about £15 billion.
As part of Sunak’s separate £21 billion package of measures announced this week, pensioners will receive a top-up to their annual £200-£300 winter fuel payment in November and six million people on disability benefits will get a one-off payment of £150 in September. Sunak recently announced that all households would receive an automatic discount of £400 on their energy bills. He also refused to rule out more spending to ease the cost of living crisis but promised not to leave a legacy of debt for the country’s children. The chancellor defended himself as a “fiscal conservative” as Tories were divided over his £21 billion package. The chancellor said it was right to act when families were facing “acute distress”.
