THOUSANDS of low-income workers could lose up to £716 a year if benefits don’t rise in line with inflation.

Official figures released today show prices are rising at a rate of 10.1% thanks to soaring food and energy costs.

Hairdressers will lose out the most in benefits are uprated with wage growth figures

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Hairdressers will lose out the most in benefits are uprated with wage growth figures

Inflation is a measure of how the price of goods and services have changed over the past year.

And for many years benefits have been raised each April in line with the previous year’s September inflation figures.

But the government has failed to commit to uprating benefit payments rising in line with prices.

So if benefit payments don’t rise by 10.1% – people’s purchasing power is dramatically reduced.

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Instead, it’s thought that ministers could use July’s wage growth figure of 5.5%.

And new data from the Child Poverty Action Group shows that a typical working family with two kids earning less than £24,700 a year will lose £752 with a real-term pay cut to benefits.

However, the cut to National Insurance from November 6, will shed some relief for certain households depending on their incomes.

When taking into account the National Insurance cut, hairdressers, will lose out the most if benefits don’t rise by 10.1% next April and instead rise by wage growth at 5.5%.

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We’ve listed the other professions facing the biggest loss from their benefits payments if they rise with wages instead of inflation next April:

  • Waiters and waitresses – set to lose £707 next year
  • Teaching assistants – set to lose £686 next year
  • Nursery nurses – set to lose £685 next year
  • Pharmacy assistants – set to lose £679 next year
  • Retail cashiers – set to lose £671next year
  • Receptionists – set to lose £667next year
  • Chefs – set to lose £653 next year
  • Street cleaners – set to lose £651next year
  • Care workers – set to lose £649 next year
  • Hospital porters – set to lose £637 next year
  • Van Drivers – set to lose £622 next year
  • Security guards – set to lose £588 next year
  • Postal workers – set to lose £563 next year

Chief executive of Child Poverty Action Group Alison Garnham said: “The bare minimum government can do is to confirm it will raise benefits in line with inflation.

“With so much uncertainty and fear, families are terrified, and it’s unthinkable that children will be forced to bear the brunt of the government’s economic mistakes.”

Director of policy and campaigns at Action for Children, Imran Hussain, said: “A cut in the true value of benefits would cause immense long-term damage to so many of the low-income parents and children we support who are already struggling to survive on the breadline.”

The government has still refused to confirm whether it will honour the previous government’s commitment to uprate benefits to match inflation.

The same uncertainty remains for pensioners after the government also failed to commit to reinstating the triple lock yesterday.

What happens to weekly benefit payments if they only rise by 5.5%?

Based just on the standard allowance of Universal Credit, a single person over 25 would be £15 worse off per month and £180 worse off per year.

This is because their standard monthly allowance would increase from £335 now to £353, instead of £368 to stay in line with inflation.

A couple over 25 with children currently get £1,015 a month.

They would be £44 worse off per month, or £528 per year.

But the real impact will be much greater as lots of other vital top-up payments are affected.

Some elements, such as housing benefit, do not rise in line with inflation so it is difficult to give a true picture.

What’s happening with inflation?

The UK’s rate of inflation hit 10.1% in September driven by soaring food and energy prices.

It comes after inflation temporarily fell in August to 9.9%, but with levels at 10.1%, inflation is now back at a 40-year high.

Rising food prices were the major factor which drove inflation up between August and September 2022.

Food and non-alcoholic beverage prices rose by 14.6% in the 12 months to September 2022, up from 13.1% in August.

The current rate is estimated to be the highest since April 1980.

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But the continued fall in the price of motor fuels has helped keep inflation lower than it if prices remained high, according to the ONS.

The BoE now predicts that inflation will peak at 11% in October and then remain above 10% for a few months after.

This post first appeared on thesun.co.uk

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