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Value of benefit payments at 50-year low

The 3.1% increase that comes into effect today is based on inflation as of last September. However, inflation is expected to hit 7.7% this month. This means households in receipt of benefits will experience a real-terms cut to their incomes.

Since 1972, ministers have decided how much to increase benefit levels by each year based on an assessment of inflation. Since 1987, they have typically considered the rate of inflation the previous September to decide benefit levels each April.

A new analysis by Joseph Rowntree Foundation (JRF) has found that for eight of the 10 benefit level changes between 2013 and 2022, the basic rate of unemployment benefits has lost value, leaving it at a 35-year low in real terms.