This March 2022 briefing presents original analysis from the Legatum Institute using the Social Metrics Commission’s approach to poverty measurement to demonstrate the poverty impact of a series of options for the uprating of benefits for the 2022-23 financial year. This briefing also presents breakdowns of the poverty impact by age, family work-status and disability.

Benefits are being uprated by 3.1% in April 2022 (based on the rate of inflation (CPI) in September 2021). Inflation has increased dramatically since, and is almost certain to exceed 7% in April 2022. Benefit claimants are therefore facing a real-terms cut in their benefits. This briefing assesses the poverty impact and cost of three options for uprating benefits

1. Uprating of all benefits, including the state pension, by 7%.
2. Uprating of working-age benefits by 7%. The state pension, and other benefits for those of pensionable age, are uprated by 3.1%.
3. Uprating of benefits related to disability or caring by 7%. All benefits that are not related to disability or caring are uprated by 3.1%.

This briefing shows that uprating all benefits by 7%, at a cost of £7.4bn will reduce the number of people in poverty by 450,000. Conversely, failing to do so will consign 450,000 people to poverty, including 130,000 children and 150,000 pensioners.