The impact of the benefit freeze and £20 uplift

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The benefit freeze alone wiped almost 8% off the value of benefits it included relative to inflation in just three years, with other cuts taking place on top of this.

The £20 uplift to Universal Credit and Working Tax Credits was put in place in April 2020 but was removed in October 2021. Increased in-work support in Universal Credit was put in place from late November 2021.

The uplift and the increased in-work support will take hundreds of thousands of people out of poverty.

The uplift is more than enough to compensate for the cuts since April 2016 solely due to the benefit freeze (although there were other cuts during the earlier period), but this wasn’t applied to all benefits. Now the uplift has been removed, the basic rates for all benefits previously included in the freeze are below their pre-pandemic levels (once inflation has been taken into account.) They have reduced by 9% compared with inflation or 13% compared with earnings over the last 5 years.

The data presented here is from our 2022 UK Poverty report, setting out the trends and impacts of poverty across the UK. Read the full report at UK Poverty 2022.