To ask the Secretary of State for Work and Pensions, what assessment she has made of the impact of the 3.2 per cent rise in inflation on the financial wellbeing of recipients of universal credit.
This answer is the replacement for a previous holding answer.
27 September 2021
The Chancellor announced a temporary six-month extension to Universal Credit uplift at the Budget on 3 March to support households affected by the economic shock of Covid-19. Universal Credit has provided a vital safety net for six million people during the pandemic, and the temporary uplift was part of a COVID support package worth a total of £407 billion in 2020-21 and 2021-22.
Separately to the Universal Credit Uplift, the Secretary of State completes an annual review of most benefit rates for people below State Pension age to determine whether they have retained their value in relation to the general level of prices. Where prices have increased relative to the value of those benefits, the Secretary of State will increase certain disability and carers’ benefits – such as Personal Independence Payments and Carer’s Allowance – at least in line with that increase. She may also decide to increase other benefits, such as the Universal Credit Standard Allowance. That decision is discretionary, but it is conventional that these rates are also increased in line with the increase in prices as measured by the Consumer Price Index. The up-rating review is conducted in the Autumn of each year, with the outcome announced in November and the new rates implemented the following April.