Theresa May’s Conservative Party conference pledge that austerity is coming to an end has been shown to be nothing more than a blatant lie, as new research reveals that low-income households are set to lose around £210 in vital income next year.

Analysis published today (Saturday) by the left-leaning Resolution Foundation thinktank shows that the ongoing freeze to working age benefits will continue to hit families in the pocket.



Since April 2016, working age benefits – including Child Benefit, Tax Credits, Universal Credit, Housing Benefit and Jobseeker’s Allowance – have been frozen in cash terms as a result of the four-year freeze announced in July 2015 by the then Chancellor George Osborne.

Resolution Foundation analysis, based on CPI inflation coming in at 2.7 per cent again next week, finds that the four-year benefit freeze is expected to save the Treasury £4.7bn next year (2019-20), far more than the £3.9bn it was originally forecast to save.

This suggests that the value of working-age benefits will fall by 6.4 per cent over the remaining years of the freeze, unless the inflation rate improves or worsens – affecting over 10 million households, including 7.3 million children and 2.4 million disabled people.

Based on these figures, the very poorest households are forecast to be one of the biggest losers, with a cumulative loss from the four-year freeze of around £620, while single parents will lose out on even more (£720).

Resolution Foundation has called on Chancellor Philip Hammond to use the Autumn Budget later this month to call time on the benefit freeze to help boost living standards for the UK’s poorest households.

Adam Corlett, Senior Economic Analyst at the Resolution Foundation, said: “While the Prime Minister this week repeated her claim that austerity is over, significant cuts in support for millions of low-income families are set to continue next year as a result of the ongoing freeze in working age benefits.

“On Wednesday we will learn the full scale of next year’s benefit freeze, with an average lower-income family with kids on course to lose over £200 a year.

“The Budget represents a last chance to cut short the benefit freeze. Scrapping it would send a strong signal that, from the perspective of low-income families, the government is committed to ending austerity.”