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Benefit freeze to end in April 2020, government announces
The government will allow working-age benefits to rise by inflation next year, ending the freeze imposed by George Osborne in 2016.
From April 2020, working-age benefits will rise by 1.7% – the current rate of the Consumer Price Index of inflation. This rise will cover people on Universal Credit, as well as legacy benefits.
However, charities and campaign groups said the move did not go far enough as the four-year freeze had left rates far below inflation – particularly with regard to housing.
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Announcing the move, work and pensions secretary Therese Coffey said: “We’re clear the best way for people to improve their lives is through work, but we know some people require additional support.
“Our balanced fiscal approach has built a strong economy, with 3.6 million more people in work since 2010. And it’s that strong economy which allows us to bolster the welfare safety net by increasing benefit payments for working-age claimants now.”
However, Jon Sparkes, chief executive of Crisis, said the move was not enough for people who could not cover their rent through benefits.
“Unfreezing the freeze is not enough. Housing benefit needs to cover the cost of rents if it is to stop thousands more families and individuals being pushed into homelessness,” he said on Twitter.
Sam Lister, policy and practice officer at the Chartered Institute of Housing, added: “The last time benefits were up-rated fully by inflation was 2012. If the freeze ends they will still only be worth 91% of their 2012 value. A loss of £377 a year for a jobseeker – that’s [equal to] going over a month without anything for living expenses.”
Housing organisations have previously warned that the cap on Local Housing Allowance (LHA) rates – the benefit available to those seeking private rented accommodation – is causing homelessness.
This is because private rents have been rising in the four years of the freeze, creating a gap between what is available in benefits and the cost of renting a home.
Crisis has launched a campaign called Cover the Cost, which calls on government to restore LHA rates to the position they would have been in if they were not frozen. The charity believes this move could lift 35,000 children out of poverty.
When the freeze was announced in 2016, it was always supposed to end in 2020.
