Universal Credit and benefits due to rise by 3.1% in April

Benefits including Universal Credit are expected to increase by 3.1 per cent in April 2022, according to the single parent charity Gingerbread, which has called for a rise of 6 per cent instead¹. The charity set out its position on 4 February 2022, responding to a package of cost of living measures announced by the Chancellor, Rishi Sunak¹.

Gingerbread describes the 3.1 per cent figure as "the current 3.1% expected increase" and argues the government should instead consider "increasing benefits, including Universal Credit, by 6% in April to align with the projected rate of inflation"¹. The charity says 75 per cent of single parents are in receipt of Universal Credit, and that this number is likely to rise¹. It puts the number of single parent families in the UK at 1.8 million¹.

The call follows Ofgem's energy price cap announcement, which Gingerbread says will mean electricity and heating bills are likely to rise by an average of £693 per year for households across the UK¹. The Chancellor's measures in response included a £200 repayable discount on energy bills in the Autumn, a £150 Council Tax rebate for some households, and additional funding for the local authority administered Household Support Fund for lower income households¹.

Gingerbread cites analysis from the Joseph Rowntree Foundation showing single parent households will soon expect to pay 22 per cent of their household income, after housing costs, on energy bills, and estimates from the New Economics Foundation warning that single parent households will see their bills rise 56 per cent faster than the average¹.

Benson added that the measures announced by the Chancellor "simply do not go far enough in protecting the most vulnerable families"¹.

Why it matters for households

The 3.1 per cent figure applies to benefits including Universal Credit from April 2022, and the rate at which benefits rise each April is set through the annual uprating process¹. For households whose income comes wholly or partly from benefits, the gap between a 3.1 per cent rise and the 6 per cent Gingerbread is calling for is the difference between the increase announced and the projected rate of inflation the charity cites¹.

The energy costs described by Gingerbread fall on the same households at the same time. The charity says the price cap change means average bills rise by £693 a year, and that single parent households will soon expect to pay 22 per cent of their household income after housing costs on energy¹. The £200 energy discount is repayable and comes in the Autumn, while the £150 Council Tax rebate goes to some households only¹.

Gingerbread says 75 per cent of single parents receive Universal Credit, so changes to the rate at which that benefit rises affect that group directly¹. Households on Pension Credit and other benefits are covered by the same uprating announcement, though the sources here do not give figures for individual benefits.

What happens next

The 3.1 per cent increase is expected to take effect in April 2022¹. Gingerbread has called on the government to act urgently and to consider a 6 per cent increase instead¹. No government response to that call is reported in the source.