Increased Benefits and No Magic Lamp Budget 22

Published / Last Updated on 18/11/2022

The Autumn Statement has grabbed all the headlines with “robbing the strivers”, “robbing taxpayers” and “biggest standard of living fall since 50s” and with not much praise for the inflation 10.1% increases to state pensions and benefits.  ‘Wake up and smell the coffee’ you headline greedy journalists and narcissistic politicians.  The reality is we have over £500bn of covid-19 debt, furlough pay, grants, self employed support schemes, vaccination programmes, the 2nd biggest military support in the world for Ukraine plus another £60-70bn of support for energy grants, low-income household additional support, more NHS, social care, and education funding. 

There is no magic lamp to rub and churn out money.  Whether your politics are blue, red, yellow, purple, or green, if you borrow money it has to be paid back.  Granted, some of the debt will be devalued by inflation over the years but we need to pay more tax to repay our debts and need to be able to demonstrate that we are taxing people accordingly to give confidence that the UK ca pay its debts.  We will need to borrow more over the years. 

Help for Pensioners and Low-Income Households

Many pensioners and those on benefits do not have any means to increase their income which would leave them at risk with high energy costs and inflation.  These people need help:

State Pension Triple Lock of the higher of inflation, wages inflation and 2.5% pa was honoured = 10.1% increase.

  • New State Pension currently £185.15 per week rising to £203.85 per week.
  • Old Basic State Pension currently £141.85 per week rising to £156.20 per week.

Pension Credit (a minimum income guarantee for those without full state pensions) and lower benefits.

  • Single person minimum income guarantee of currently £182.60 per week rising to £201.04 per week.
  • Couples’ minimum income guarantee of currently £278.70 per week rising to £306.84 per week.

Many other benefits are also rising by 10.1% pa.

Most Vulnerable Help

Energy bills cap increased from £2,500 to £3,000 for the average consuming household.  This will hurt a little but is still not near the real cost of energy.

Additional cost of living grants next year for those on benefits of an additional £900 plus an additional £300 for pensioners and £100 for the disabled.

Social Housing

4 million people live in social housing, and their rents (if they actually pay rent rather than benefit support with virtually free housing) usually rise by inflation i.e., this year 11.1% but a cap has been set at a maximum 7% rise.

National Living Wage – up 9.7% to a minimum of £10.42 per hour.

NHS, Social Care and Education are also receiving huge boosts to their funding.

It is the ‘middle’ and ‘higher’ earning taxpayer that will foot this bill but at least we are looking after our elderly and vulnerable.

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