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Stop hardship becoming ‘new normal’ charity urges Government 

07 July 2023

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THE Government must do more to stop high levels of hardship becoming entrenched as a “horrendous new normal”, a study from the Joseph Rowntree Foundation (JRF) says.

It reports that 5.7 million low-income households are having to cut down or skip meals because they do not have money for food; 2.3 million low-income households on Universal Credit (UC) are being forced into changing the kind of food that they buy; and nine in ten of these households have gone without at least one essential, for the third survey in more than a year.

The “new normal” is described as one of “never catching up with bills, consistently going without essentials, and suffering from worsening physical and mental-health conditions”. But the report, based on JRF’s latest cost-of-living tracker says that this does not need to be the case. “We can reform our Social Security system to ensure it supports us all to at least afford the essentials whilst we recover from setbacks, and doesn’t pull us into debt.”

The findings come from an online poll of 4004 low-income households in the UK, conducted by Savanta ComRes between 3 and 18 May. JRF has been tracking the cost-of-living crisis since September 2021.

The poll finds that low-income households are struggling to afford their bills: it suggests that 4.5 million are in arrears, and 2.6 million have taken out high-cost credit loans with loan sharks, doorstep lenders, payday lenders, or pawnbrokers.

On average, prices increased by more than 18 per cent for the two years from April 2021, with “eye-watering rises in energy prices being replaced by record food inflation and housing costs continuing to soar”, it says. Younger respondents aged 18 to 34 are in households more likely to be struggling. Low-income households in London are more likely to be in every type of arrears. As in previous surveys, Black respondents are in households facing “highly elevated levels of hardship”.

The situation remains persistently poor for low-income households on UC. The survey found that food inflation had significant consequences: more than two-thirds of these households — 69 per cent — had changed the type of food that they bought, and 69 per cent had cut back on food for adults; and 1.5 million households on UC reported experiencing a poor diet. “This is despite around 80 per cent having received a cost-of-living payment during the survey,” the report says.

“This emphasises just how unaffordable everyday life is, with our social safety net not even enabling people to cover the cost of life’s essentials like food, warmth, and clothing.”

The study points out that the basic rate of benefits increased by one fifth in the decade from April 2013, during which time inflation and earnings grew by one third: “While declining living standards are concerning for all, every month, low-income households are bearing the brunt of yet another month of trying to stretch household budgets even further, despite years of already doing so.”

JRF’s Grassroots Poverty Action Group had been warning of “embedded and persistent hardship”, and had highlighted how, for many households on low incomes, support received was used to pay debts first. “It was clear any support was only providing short-term relief,” the report says.

“Given the significant debt burden that many are facing with most households in arrears in multiple areas, and owing an average of around £1600, coupled with food inflation at record highs, it is unsurprising that the payments have done little more than dampen down the worst of debt and hardship for many families.”

It recommends working towards the introduction of an Essentials Guarantee, which would make sure that the basic rate of UC “at least covered the essentials and that deductions could never pull support below this level”.

It also recommends unfreezing Local Housing Allowance and, at a minimum, realigning it with the bottom 30th percentile of local market rents, and ensuring that the Renters Reform Bill does not allow landlords to raise rents to unaffordable levels for tenants, using a legal loophole to to get them out.

Low savings levels are highlighted as a concern, almost one third of low-income households (3.7 million) having less than £200 in savings, and 51 per cent less than £1000.

The report acknowledges that government support is helping to pay down debt and help with food insecurity, but “still leaves levels of hardship unacceptably high”. Each cost-of-living payment made over the past year or so resulted in a temporary dip, of about a month, in demand for crisis support such as debt services and foodbank referrals.

The survey also documents mental and physical consequences of not having enough money. The stress is also showing up in poor mental health and a loss of sleep, it finds. “The stress of worrying about affording the essentials and getting behind on bills is leading to a spiral that affects all parts of life.

“We heard repeatedly about the struggle members faced to get timely, appropriate mental-health support, with many left to cope alone. Mental Health Foundation research carried out in November 2022 into the impact of the cost-of-living crisis on mental health found that, of adults surveyed in the UK, ten per cent reported feeling hopeless, 34 per cent anxious, and 29 per cent stressed.”

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