Universal Credit statistics have been released by the DWP. Fewer new claims have been made in recent months but warnings have emerged they could once again skyrocket as the winter arrives.
Myron Jobson, a Personal Finance Campaigner at interactive investor, commented: “A large number of people have struggled to make ends meet during the pandemic, with many experiencing a significant loss of income and unemployment.
“While the latest figures reveal fewer new claims are being made than before the pandemic following the reopening of society, the financial situation resulting from the pandemic has far from stabilised – and the prospect of a new wave and new variants of coronavirus in the winter months exacerbates matters.
“To make matters worse, the nation’s most vulnerable people face a further kick in the teeth if plans to scrap the £20 uplift to the amount received by Universal Credit claimants go ahead.
“The bumper payments have been a vital lifeline for many families and cutting it when we haven’t properly got back to routine could push many into crisis.
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“The end of Covid-19 restrictions doesn’t mark the end of impact the pandemic is having on personal finances.
“It is important now more than ever to pay extra attention to your financial wellbeing and consider what protective steps you can take now to avoid money worries later on as we enter a winter of uncertainty.”
Today, inflation figures were also released and while the CPI dropped from 2.5 to two percent in July, warnings have been issued on what may be on the horizon come winter.
Sarah Coles, a personal finance analyst at Hargreaves Lansdown, explained: “Next month, when the artificial bump in 2020 falls out of the figures, we’re going to feel the pain from these price rises more keenly, so inflation will rise again. The Bank of England expects it to hit four percent towards the end of 2021.
“At that point, it expects it to drop back, as the impact of the first lockdown drops out of the figures, and supply bottlenecks unwind, so there’s not as much pressure on prices.
“However, inflation prediction is not an exact science, and there are some signs of more enduring inflationary pressures.
“The cost of raw materials is rising for manufacturers, and while many of them are keeping a lid on the price of the finished products, if they come under too much pressure, they’ll pass them onto consumers.
“They also face the threat of possible wage rises as vacancies hit record highs.
“If we get prices and wages both rising together, we could find ourselves in an inflationary spiral that’s very hard to get out of.
“On the flip side, you can never discount recovery being derailed by the virus again.
“How the spread of the Delta variant changes when we move inside during the autumn and winter is an unknown quantity, while new variants could cause a whole new set of problems.
“If this happens, inflation could be a distant memory in a matter of weeks.”