A new policy paper from NIESR calls for an emergency uprate of £25 a week in Universal Credit to deal with rising costs.
Real incomes are expected to fall by 2.4 per cent in 2022, accompanied by a small rise in unemployment in 2023 to 5.1 per cent, according to a new policy paper from the National Institute of Economic and Social Research.
The paper calls for emergency support to cushion the income shock, including a Universal Credit uplift of £25 per week between May and October 2022 [at a cost of around £1.35bn] and an additional payment of £2.85bn to 11.3m lower income households, amounting to a oneoff cash payment worth £250 per household for 2022-23.
It estimates that 1.5 million households across the UK face food and energy bills greater than their disposable income, with the highest incidence in London and Scotland. However, it also predicts private consumption growth of 4.7 per cent this year, with some families able to use some of the estimated £200 billion of savings they accumulated under Covid-19 to smooth spending patterns and ensure that consumption falls by less than income.
The report comes as the Living Wage Foundation revealed that over 10,000 UK employers are now accredited with it, nearly half (over 4,500) of whom have signed up since March 2020. It says the campaign has put over £1.8 billion in extra wages in the pockets of low paid workers since it started 20 years ago and that one in 13 UK workers now work for a Living Wage Employer. However, it estimates that one in six workers (4.8 million) are still paid below the real Living Wage.
Living Wage Employers commit to paying all staff – including contracted workers – the independently calculated rate, currently set at £9.90 in the UK and £11.05 in London. The real Living Wage differs from the Government’s National Living Wage [currently £9.50 an hour across the UK] is calculated annually and takes into consideration the cost of food, bills, and rent.