Low-income families 'terrified for winter' as inflation stays high

Cost of living payments won’t keep the wolf from the door this winter
Big gap between energy and food prices and benefit rises since pre-Covid
Government must commit to increasing benefits at least in line with inflation

As the Government’s Autumn cost of living payment starts to hit doormats from today, Child Poverty Action Group and Changing Realities warn that they won’t be enough to prevent more hardship for families with children this winter. New analysis for CPAG shows a big gap for struggling families between benefit levels and rising prices - benefits for a couple with two children having increased by only £2000 since before Covid, while energy and food have together risen £4000 in that time.* The cost of living payments are flat-rate payments and so don’t adjust to household size – a single childless person receives the same as a family of four. What families need is certainty that benefits will be increased at least in line with inflation.

Low-income parents from the Changing Realities project warn they are ‘terrified for this winter’ as inflation stays high. Low-income families are especially vulnerable to inflationary pressures as they spend a higher proportion of their budgets on food, housing and energy. New analysis for Changing Realities shows the lowest income families spend twice as much (as a share of total spending) as richer families on housing, water, electricity and food.

Chief Executive of Child Poverty Action Group Alison Garnham said:

There is no let-up for low-income families as the cost of living crisis continues to bear down on them and 4.2 million children are living in poverty. People are deciding now how best to deal with the hunger and cold to come. A real-terms income cut next April would be unmanageable for these families. The Chancellor must do right by children and commit to an inflation-based benefit increase. To do otherwise would pull many more children into poverty with the government attempting to balance the books at their expense.

Professor Ruth Patrick from the University of York who leads Changing Realities project said:

Our new analysis makes clear just how vulnerable the poorest households are to continued high prices. Those with the least spend the greatest proportion of their income on food, energy and housing, and have completely run out of places to cut back. Families face a constant, daily crisis as they struggle to make ends meet, and are terrified of how they will survive this winter. The Government must act, and uprating benefits in line with inflation is a vital first step to providing families with more security this winter.

Parent-participants in the Changing Realities project report:

The first time since the weather has turned – am on emergency gas and my daughter’s telling me she’s cold. It breaks my heart as she just turned around and said, "I’ll just put a jumper on". It’s gonna be a long cold winter, I can’t keep my heating on. (Charles 22nd September 2023)

… while the price of some things has gone back down a bit … there are still millions of families, like mine, that are going to have no choice but to leave the heating turned off this winter and stay cold in our own homes due to the cost. ((Erik, single, disabled parent, 8th September 2023)

I had the biggest bill I’ve ever had in my life from February to May this year, and I’ve only just paid it off, so the prospect of that happening again is terrifying. (Evelyn, 25th September 2023)

This September has hit the hardest. I have had to make cuts to what I buy in terms of school uniform, eking out last year’s tattered uniform and making do with items outgrown. The cost of childcare has increased, too, and that has put an enormous strain on my budget. (Aurora, 8th September 2023)

Things are still creeping up....there are fewer options for making any more cuts now. And as my children get older, there are bigger costs associated with them. It still feels very overwhelming. (Sadie, 8th September 2023)

No bills have come down...Food shopping hasn't come down. .We're just having to survive any way we can. It's definitely not getting any better, if not worse. (Roxy, 8th September 2023)

I’m finding now more than ever I’m really losing sleep over worrying about money. ... it doesn’t seem to be getting any easier. I’ve just got my daughter a place in playgroup because it’s cheaper than ‘childcare’ to try and free up some hours for me to be able to get back to work and I honestly don’t know how I’m going to manage. It’s £210 a month for only 12 hours a week. Jobs don’t even pay an hourly rate that’s enough to cover it. (Savanna, 8th September 2023)

I've never had such expensive shopping, such expensive services, and just generally the amount that is coming in won't be enough to cover what's going out. And I'm frightened and I'm really sick of being frightened... (Evelyn, 9th September 2023)

In addition to uprating benefits in line with inflation Changing Realities and CPAG want an immediate:

sustained investment in social security (in place of flat-rate, cost-of-living support payments)
abolition of the two-child limit and benefit cap and
unfreezing of the Local Housing Allowance.

Notes to editors

The Government has so far not said that it will uprate benefits next April by this September’s inflation rate, as is the norm for uprating.

Read the Changing Realities report

*Methodology:

Benefits calculated as difference for a couple with 2 children on universal credit claiming child benefit (no housing-related benefits) between 2023-24 and 2019-20.

Energy/food calculation calculated as difference in the cost of food and fuel consumption for a couple with 2 children between 2020 and 2023.

Author’s calculations from A Minimum Income Standard for the United Kingdom in 2023, JRF, 2023 and Standard MIS Budgets, Loughborough University, 2023. The MIS covers the costs of essentials such as food, clothes and shelter as well as other costs necessary to participate in society. For further information, see https://www.lboro.ac.uk/research/crsp/mis/

Changing Realities is a participatory research programme working in partnership with over 100 parents and carers living on a low income. It is a collaboration between parents, the universities of York and Salford and Child Poverty Action Group. The project is funded by the abrdn Financial Fairness Trust. The views expressed here and in the briefing are those of CPAG and Changing Realities and not necessarily the Trust. abrdn Financial Fairness Trust funds research, policy work and campaigning activities to tackle financial problems and improve living standards for people on low-to-middle incomes in the UK. It is an independent charitable trust registered in Scotland (SC040877).

Child Poverty Action Group works on behalf of the more than one in four children in the UK growing up in poverty. Our vision is of a society free of child poverty, where all children can enjoy a childhood free of financial hardship and have a fair chance in life to reach their full potential. We use our understanding of what causes poverty and the impact it has on children’s lives to campaign for policies that will prevent and end poverty – for good. We provide training, advice and information to make sure hard-up families get the financial support they need.

Media contact: Jane Ahrends Child Poverty Action Group: 07816 909302/020 7812 5216