'Woefully out of touch': The group of people ignored by Rishi Sunak’s spring statement

Unveiling his spring statement on Wednesday, Rishi Sunak attempted to combine his ambition to be a low-tax chancellor with the pressing need to tackle the growing cost of living crisis.

With pressure mounting to help those already struggling, the chancellor loosened the purse strings, confirming his plan to raise the threshold at which people start to pay national insurance by £3,000.

This, he said, "puts billions back into the pockets of people across the UK".

However, for the millions of people relying on universal credit and state pensions, no new help was forthcoming.

Sunak's failure to increase benefits in the face of spiralling inflation saw him accused of being “utterly out of touch”.

Read more: Warning that bread and pasta prices could increase by 50%: 'It might not end there'

Most benefits, including universal credit and state pensions, are set to rise by 3.1% in April. The increase, voted through by MPs in February, is based on inflation data from September 2021.

Since then the cost of living has soared far higher, leaving those on universal credit facing a real-terms cut to their incomes.

On Wednesday, Office for National Statistics (ONS) data showed inflation has hit record levels - rising 6.2% in the year to February 2022, the highest for three decades.

Shadow work and pensions secretary Jonathan Ashworth criticised the decision not to uprate benefits in line with inflation.

He said: "Rishi Sunak has today confirmed he is imposing punishing and severe real terms cuts to vital support like universal credit and basic state pension.

"He’s utterly out of touch as to how devastating this cost of living crisis."

Paul Johnson, director of the Institute for Fiscal Studies (IFS), told the BBC's Politics Live: “What was completely missing was anything for people on universal credit or the state pension, which is only going up by 3.1% this month when inflation will be around 8%.

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“[It is] a big cut in living standards for those on the very lowest incomes.”

The IPPR think tank called the move "woefully out of touch", saying: "Faced with the highest forecast inflation for a generation and warnings that the poorest families risk being pulled further into poverty and debt, Rishi Sunak’s refusal to raise social security benefits faster was a missed opportunity."

Sunak outlined a range of measures, including raising the national insurance threshold, and cutting 5p from fuel duty.

Despite the chancellor's instance that he wants to bring down taxes, the tax burden is at its highest since the 1960s.

According to analysis with the Office for Budget Responsibility (OBR), households face the biggest fall in living standards on record, despite Sunak's promise of tax cuts.

The OBR said inflation – combined with rising taxes – will “weigh heavily on living standards in the coming 12 months”.

The fiscal watchdog forecast a fall in real household disposable incomes per person of 2.2% in 2022-23, the biggest hit in a single year since records began in 1956-57.

Their report said living standards would not return to pre-pandemic levels until 2024/25.

Read more: 3 charts that explain the UK's cost of living crisis

Elsewhere, other key announcements to help with the cost-of-living crisis included:

• The employment allowance will increase from £4,000 to £5,000 allowing small businesses to reduce their national insurance contributions.

• VAT on energy-saving materials such as solar panels, heat pumps and roof insulation will be reduced from 5% to zero for five years.

• Green technology will also be exempt from business rates from April, saving firms £35m in 2022-23.

Spring Statement: The key points from Rishi Sunak's mini budget – from fuel duties to income tax