Universal Credit set to increase by £470, but there's a catch

Chancellor Jeremy Hunt delivered his Autumn Statement on Wednesday 22 November, in which he announced some highly-anticipated changes. As many Brits have been struggling with the cost of living, for which the government already issued three payments of £300, Hunt confirmed that Universal Credit and other benefits will increase by 6.7%.

Here’s where this figure comes from, and why many people are criticising another aspect of Hunt’s plan which works against this change.

Universal Credit will increase by £470

Addressing the Commons, Hunt stated that Universal Credit, Attendance Allowance and PIP will increase by 6.7%. This will come into force in April 2024 and provide an ‘average increase of £470 for 5.5 million households’.

If you are wondering how this percentage is decided on, benefits are usually adjusted every April based on inflation statistics from the previous September. This year, the Consumer Price Index (CPI) inflation rate increased by 6.7 %, but as Express explains:

Following October’s sharp drop in inflation to 4.7 percent, there was speculation that the Treasury would consider using that figure for the annual uprating instead.

However, this increase comes with some bad news for claimants.

It will be harder to claim benefits

Hunt, who has an enormous estimated net worth himself, also announced a new plan that will crack down on unemployment claimants. With his ‘Back to Work’ initiative, welfare recipients who don’t find employment within 18 months will have to undertake work experience.

The idea is to get more people into jobs, and those who don’t comply will lose their rights to benefits. This doesn’t just include the payments they receive, but also their access to free prescriptions and legal aid - which will be cut off.

The plan has been supported by £2.5billion worth of funding, and aims to get people to ‘look for and stay in work’, ‘manage their health conditions’, and ‘stem the flow’ of inactivity due to illness. This move has faced a lot of criticism for being too harsh, and many see it as taking away from the 6.7 % increase.

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Sources used:

The National: Martin Lewis reacts to Universal Credit £470 increase

Express: Universal Credit will increase by £470 on average for vulnerable households