Poorest families would lose £400 a year under Liz Truss benefits plan

Linking with pay rather than inflation would leave households worse off - but ministers must get measure past their own MPs

Low-income households will be almost 400 a year worse off under No 10's plans to increase benefits at a lower rate than inflation, new analysis for the Observer has revealed.

Liz Truss and her government are considering uprating welfare in line with earnings rather than inflation. It would mean increasing them by 5.5% rather than about 10%, according to the most recent official data, saving about 5bn.