Cost of living support for families

In light of global events that are leading to increases to the cost of living, the Chancellor and Prime Minister have indicated that they are considering support for households. 

Cost of living support can be vital for families who are already struggling. But there are important things to consider when designing and delivering support. 

• 4 million children are living in poverty in the UK and are more exposed to financial hardship as costs rise. It is vital government ensures emerging cost of living pressures do not undermine its ‘moral mission’ to tackle child poverty.
• Rising energy prices fall hardest on low-income families with children, who spend a greater share of their income on essentials.
• Earlier crises have eroded financial security for families. They have reduced savings and increased debt, leading to greater precarity, especially due to inadequately targeted support. Government can and should learn from the previous support packages.
• Previous support packages – during Covid and the height of the cost of living crisis that followed in 2022 to 2024 – were badly designed to help families with children. They did not reflect the reality that low-income families spend more of their income on essentials, so struggle when costs increase.
• These support packages also did not include support for children. The flat-rate payments did not vary by household size, meaning families with children, who face the highest costs, received no more than single adults.
• Any new support package must be proportionate to need, reflecting household size and protecting children in poverty. Delivering support to low-income households through both the standard allowance and child element of universal credit will target proportional support where it is needed most, and increasing child benefit will help low- and middle-income families with children.
• Removing the benefit cap is essential to reaching families facing the most acute hardship.