Cost of living crisis: Millions face 'perfect storm' of rising bills while UC falls behind

7 February 2022, 00:03 | Updated: 7 February 2022, 01:17

Those on Universal Credit are set to face a "perfect storm"a "perfect storm" of higher energy bills and tax rises.
Those on Universal Credit are set to face a "perfect storm"a "perfect storm" of higher energy bills and tax rises. Picture: Alamy

By Emma Soteriou

Millions of people in low-paid jobs are set to face a "perfect storm" of rising bills and taxes while Universal Credit falls behind the cost of living.

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The number of workers on Universal Credit has increased by 1.3 million since just before the start of the pandemic, the TUC said its research suggested.

The union said it has been driven by working households being pushed into financial hardship during Covid, with millions facing a "cost-of-living crunch" this year.

However, the basic value of Universal Credit is now lower than at the start of the pandemic, due to it not keeping up with inflation.

A survey of more than 2,200 workers for the TUC found one in eight said they will struggle to afford the basics in the coming months.

It comes after Chancellor Rishi Sunak recently unveiled support for Brits to deal with the upcoming increase to the energy price cap - which is predicted to rise again in October.

Following the findings, the TUC called on the Government to improve the "woefully inadequate" level of support for low-income families.

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TUC general secretary Frances O'Grady said: "Millions of low-paid workers face a perfect storm this April.

"At the same time as energy prices and National Insurance contributions shoot up, Universal Credit is falling in value.

"The Government must do far more to help struggling families get through the tough times ahead. The support package announced by the Chancellor last week is woefully inadequate.

"Universal Credit urgently needs boosting and we need further action to reduce fuel costs for those battling to make ends meet.

"Oil and energy companies shouldn't be making bumper profits while many struggle to heat their homes.

"If ministers fail to do what is necessary, more households will be pushed below the breadline."

Chancellor Rishi Sunak explains the measures to ease the energy crisis

Mr Sunak's support package to help people with eye-watering hikes in their energy bills was announced on Thursday.

The package includes: A one-off £200 discount on bills, a £150 council tax rebate for those with properties in bands A-D and a discretionary fund of £150 million for local authorities to "help those lower income households" who may live in higher council tax properties, or who are exempt altogether.

Mr Sunak said at a Downing Street conference: "I know this is probably the number one issue on most families' minds, you know - they're looking at the news, they're seeing prices go up, they're worried about the cost of living, and in particular energy, and that's why we're taking action, and I really believe that what we're doing, £350, it's a significant amount of money that will make a big difference to the vast majority of households, and I think people, I hope actually, will be reassured by us stepping in to provide that support to ease the adjustment that this is."