UK's poorest set to get new cost-of-living govt payment

The United Kingdom government has announced approximately 8 million eligible households will receive a cost-of-living payment early next year, as part of a broader support package for people on low incomes who are struggling with high consumer prices.

Eligible individuals, primarily those who receive social welfare benefits, will automatically receive the means-tested payment of 299 pounds ($374) in February.

During the past two years, the UK has encountered significant cost-of-living pressures with many people struggling to meet the escalating costs of necessities.

Inflation has slowed during the past year, after hitting a 41-year high of 11.1 percent in October 2022, but has remained above the Bank of England's 2-percent target, at 4.6 percent in October, presenting many challenges for households.

The latest government payment will be the third of three, totaling 900 pounds, made during 2023 and 2024, with previous amounts of 301 and 300 pounds already delivered.

In January 2023, the government specified the schedule for the installments of the 2023/24 cost-of-living payments, indicating that they would be distributed "across a longer period to ensure a consistent support offering throughout the year".

If a person qualified for a social welfare benefit during each assessment period during the year, they would automatically receive the corresponding cost-of-living payment.

Secretary of State for Work and Pensions Mel Stride said: "We will always protect the most vulnerable, while ensuring fairness for the taxpayer.

"We know that the best way to secure long-term financial security is through employment, so we're rolling out the next generation of welfare reforms to put thousands more people on a pathway off benefits and into work."

Chancellor of the Exchequer Jeremy Hunt said: "Inflation has halved, but I know some families are particularly vulnerable to cost-of-living pressures, which is why these payments are so important."

Slow economic growth has hit the UK's low and middle-income families hard, according to the recent Ending Stagnation report from the Resolution Foundation and the London School of Economics.

It warned that a generation of 9 million younger adults has never worked in an economy with sustained average wage rises and that a living standards gap had opened up between typical households in the UK and their average peers in Australia, Canada, France, Germany, and the Netherlands, with workers in the UK missing out on 10,700 pounds a year after more than a decade of weak economic growth and high inequality.