Pensions and benefits will not keep up with cost of living, warns think tank
Benefits should rise to match the soaring cost of living as millions face crippling price rises driven by energy bills, a think tank has said.
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Many benefits and the state pension are inflation-linked, but – by convention – rates for this year were set before prices started rising rapidly.
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It means most will only go up by 3.1% in April, half of the expected increase in the cost of living.
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The government said it had already taken “decisive action to help”.
The Institute for Fiscal Studies (IFS) said 10 million people were affected by price hikes that were not matched by benefit rises.
Raising benefits and the state pension to the same level as inflation in April would mean preventing a £290 real fall in benefit income year on year for this huge group, the economic research body said.
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