Cost of living crisis is far from over for the most vulnerable
The spring budget statement brings some welcome changes, but there's not enough support for the households that need it most.
The chancellor has cut fuel duty by 5p per litre and raised the national insurance threshold by £3000 per year. Workers won't pay any national insurance on the first £12,570 of their earnings but when they do start paying the rate will be higher (13.25% instead of 12%).
Local councils will get another £500m for the Household Support Fund. The fund is distributed through small payments to help people meet daily needs such as food, clothing and utilities. The extra £500m will create a £1bn fund to help vulnerable households with rising living costs.
Despite these steps, people’s spending power will continue to fall
The Office for Budget Responsibility says that UK households are set to see the biggest drop in their spending power since records began in 1956. Real household disposable incomes per person – that's the money people have left after covering essentials (and taking inflation into account) – are forecast to fall by 2.2% in 2022-23.
There’s not enough support for the households that need it most
Households on universal credit or receiving the state pension will not benefit from the change in the national insurance threshold. There needs to be an urgent uplift in these benefits to keep up with the rate of inflation. Otherwise, it will be people on the lowest incomes who suffer most.