Bad news on benefits - one of the lowest rises ever
Inflation will wipe out increases, even for pensioners, says Paul Lewis
From Monday 12 April social security benefits will rise by one of the lowest amounts ever. The increase in disability and out-of-work benefits will be just pennies a week. For example, people who care for a severely disabled person will get 35p a week extra to take their Carer’s Allowance to £67.60. To qualify, they have to care for at least 35 hours a week, so the increase is at most 1p an hour. If they work as well, Carer’s Allowance is taken away when they work over 14 hours a week.
Those they care for will do little better: there will be an extra 45p a week for the most disabled people on Personal Independence Payment or Attendance Allowance, taking their weekly stipend up to £89.60.
Widowed parents who lost their spouse before April 2017 will see their Widowed Parent’s Allowance rise to £122.55 a week – the extra 60p a week is not enough to buy a second-class stamp. But they’re lucky compared with more recent widows and widowers. Bereavement Support Payment was introduced for deaths from April 2017 and has been frozen ever since.
Those with children get a lump sum of £3,500 and then £350 a month for 18 months, which averages out to just £126 a week before it stops. It should average more than £135 to have kept up with inflation.
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The reason for these tiny increases is that the inflation in September 2020 was just 0.5 per cent, and that is the rate used to increase benefits.
One group is exempt. The state pension is protected by the “triple lock”, which means it rises by the highest of prices, wages, or 2.5 per
cent. This year that’s an increase of £3.35 a week on the basic state pension for those who reached pension age by 6 April 2016, taking it to £137.60.
The new state pension for younger pensioners will rise to £179.60, up by £4.40 a week. But any extras such as SERPS or increments for not claiming at pension age will only increase by the same 0.5 per cent as other benefits.
With inflation set to rise well above 0.5 per cent this year, things can only get more difficult for those who rely on benefits.
Paul Lewis presents Money Box on Radio 4