NEW FIGURES from the UK Department for Work and Pensions (DWP) show that 3.6 million children were in families on universal credit (UC) in November 2021.

Because universal credit is set to rise by only 3.1 per cent this April, when inflation is expected to peak at 7.25 per cent, most of these families face a real-terms cut of around £570 per year in social security support.

This comes just as supermarket prices and energy costs surge, new analysis from Child Poverty Action Group (CPAG) shows. For the 180,000 families subject to the benefit cap, the loss will be even greater.

The new DWP figures show 2 million families with children were receiving UC in November, and 45 per cent had a child aged four or younger. Universal credit was cut by £20 per week in October. Around 40 per cent of UC claimants are in work.

CPAG has called for an increase in social security payments of seven per cent this April to match the expected inflation rate. And to ensure the increase reaches every family that needs it, the charity wants the benefit cap removed. There are already 4.3 million UK children living below the poverty line.

The Chief Executive of CPAG, Alison Garnham, said: “The families behind today’s figures have no shelter from the storm. They are facing even higher prices and a real terms cut in social security support. Unless the Government acts, the children in those families will feel the effect, as parents are forced to cut back even more on food, heating and basic essentials. Increasing benefits in line with the expected inflation rate this Spring is the minimum protection needed and would send a signal to desperately worried families that they have not been forgotten.”

This spring, food costs alone are set to be £26 a month higher than last year for families with children in poverty, according to CPAG’s analysis.

With energy bills due to increase by 54 per cent in April, CPAG’s analysis finds families with children below the poverty line face:

  • £35 per month in extra energy costs even after the Government’s new mitigation measures are factored in
  • these families are set to spend three times the share of their income on energy, compared to better-off families (17 per cent and five per cent of disposable income after housing costs, respectively)

Existing data shows lone parent families in poverty face will have to spend around £1 in every £4 of their disposable income to use the same amount of energy this April, even after the Government’s council tax rebate scheme is factored in. Couple-families in poverty will spend £1 in every £7.

Out-of-work benefits are at their lowest level in 30 years, after successive real-terms cuts. CPAG analysis shows that in 2009, an out-of-work lone parent could afford two-thirds (66 per cent) of the goods and services required for a minimum acceptable standard of living. In April 2022, they will only be able to afford half (54 per cent) of the required goods and services.

* Read Nothing left to cut back: rising living costs and Universal Credit here.

* Source: Child Poverty Action Group