Almost four million families will be worse off due to the government axing the £20 uplift to Universal Credit, experts warn.
The government brought in the £20-a -week boost to the benefit to help claimants during the worst of the coronavirus pandemic, but it finally ended in October .
The benefit cut means households will be £1,000 a year worse off from this autumn.
Now the Resolution Foundation think tank says the uplift being cut makes 3.6million families worse off next year.
The think tank says 1.3million families on Universal Credit will be better off due to Conservative changes announced during the Budget last month.
Chancellor Rishi Sunak announced a surprise 8p cut in the taper rate from 63p to 55p.
The taper rate is the amount of Universal Credit that gets withdrawn for every pound a claimant earns through work.
And the work allowance - the amount some claimants can earn before the taper kicks in - will be raised by £500 a year.
The £2bn-a-year change means working benefit claimants keep 45p of every extra pound they earn, instead of 37p.
But the Foundation says over half of families will be worse off by more than £1,000 a year when everything is factored in, and 75% will see a drop in income.
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Resolution Foundation senior economist Karl Handscomb said: "While welcome, these changes are not enough to offset the damage from the recent £20 a week cut to Universal Credit.
"While 1.3 million families on Universal Credit will be better off, almost three-quarters of UC families will see their incomes fall this autumn as the cost of living crunch bites.
“Universal Credit has performed extremely well during the crisis. But the recent cut in support means that our basic safety net remains far too weak to support families facing economic bad news.”
The news comes as households are already weathering increases in energy bills and petrol prices..
Sky high gas prices are pushing bills up for millions of households – while leaving others without an energy supplier altogether.
Meanwhile consumers could soon pay at least £14.63 extra for their weekly 'big shop' if supermarkets pass on looming price rises.
The cost of petrol has hit a series of all-time highs this year , hiking the cost of running a car.
The dramatic hike has been driven primarily by the oil price doubling from around $40 a barrel a year ago to $85 now – but some analysts predict it could hit $90 by the end of the year.
Households are also dealing with the soaring cost of inflation.
Inflation will soar to 4% this winter spelling a cost of living squeeze for millions of families, according to Sunak last month.
It means more prices rises in shops and threatens the first major hike in Bank of England base rates - and therefore mortgage rates - in more than a decade.
However, last week the Bank kept base rate steady at 0.1% , where it has been since last March.
