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Sunak and Johnson 'agree to extend' universal credit benefit

A man pulls out his credit card to make a purchase
Treasury sources said that a final decision is yet to be made, but that the chancellor and prime minister are both open to the idea. Photo: Reuters/Dinuka Liyanawatte

Boris Johnson and Rishi Sunak have agreed in principle to extend a £20-a-week increase in universal credit, The Times reported on Saturday.

The move, which is likely to be announced in the budget next year, will benefit around 6 million people across Britain, at a cost of £6bn ($7.9bn).

Treasury sources told the newspaper that a final decision is yet to be made, but that the chancellor and prime minister are both open to the idea. “The money is there,” the source said.

The state-paid benefit for working-age people was boosted by £1000 a year in March to support workers and those who might lose their jobs during the health crisis.

Universal Credit is a single monthly payment to help with living costs. It is available to people over the age of 18, in most circumstances, but under the state pension age, and with savings of less than £16,000.

Claims for Universal Credit have surged this year due to the financial impact of the coronavirus pandemic.

READ MORE: UK chancellor Rishi Sunak to compensate firms hit by Tier 2 restrictions

Earlier this week Sunak pledged more than £30bn of extra support for businesses to last until the end of March next year.

He announced that the furlough scheme would be extended for a further four months and confirmed that anyone made redundant after 23 September can now be rehired and placed on furlough.

The scheme will continue to pay up to 80% of a person’s wage up to £2,500 a month.

The finance minister said this was "to give businesses security through the winter".

"The security we are providing will protect millions of jobs," he said.

The Job Support Scheme , a less generous]support, had originally been set to replace the furlough scheme in November. It has now been postponed. Support through the Self-Employment Income Support Scheme (SEISS) will also be increased.

Yahoo Finance has reached out to the Treasury for comment.

Watch: What is universal basic income?