WELFARE payments should be high enough to cover food and other essentials, Christians Against Poverty (CAP) has said, after 11 per cent of respondents to a survey reported being unable to afford adequate or nutritious food.
The charity’s call for an “Essentials Guarantee” echoes those made last year by the Trussell Trust and Joseph Rowntree Foundation, which urged the Government to set a legally binding lower minimum for Universal Credit payments. On 5 September, the Trussell Trust reported the results of a YouGov poll of 2077 Universal Credit claimants, to which 22 per cent responded that they had used a foodbank in the past 12 months, and almost half (48 per cent) had run out of food in the past month. Two-thirds (68 per cent) of those in a working household said that they had gone without basic essentials in the past six months.
A briefing paper from CAP, Deficit Budgets: The cost to stay alive, published this month, draws on another YouGov poll, in June, of 2000 UK adults. More than one in five (22 per cent) reported having a “deficit budget”, defined as a shortfall in income (whether wages or social-security payments, excluding credit) to meet essential expenses such as rent, council tax, utilities, food, and clothing.
In a foreword, the charity’s chief executive, Stewart McCulloch, writes that “the cost to stay alive is becoming unaffordable for too many.” CAP’s workers, who offer debt advice and money coaching, were “running out of tools to navigate an increasingly unresolvable situation after all of our help”.
“It’s frustrating for our team when they have the tools to help someone out of debt but the person’s income is so shockingly low that even when the burden of debt is removed they still can’t afford life’s essentials,” he said. “Therefore, despite all the hard work of getting debt-free, life remains a constant struggle.”
The report, which draws on interviews with CAP clients, highlights the effects of deficit budgets on individuals, families, and wider society. Analysis of the charity’s own data suggests that as many as 47 per cent of its clients have an “unsustainable budget”. On average, they would need £273 more per month to have a sustainable budget. Almost six in ten (59 per cent) of new CAP clients in 2023 had an income below the poverty line (calculated as 60 per cent of the UK’s median household income after housing costs).
“At its root, insufficient income is the driver of this issue,” the report says. “There are a number of income-related reasons why people may find themselves facing a deficit budget.”
The most common barrier to increasing income referred to by the CAP clients was mental ill-health (54 per cent), followed by physical ill-health (48 per cent), lack of confidence (34 per cent), and caring responsibilities (18 per cent).
The report calls on employers to ensure that wages are “sufficient to prevent any worker from facing a deficit budget”, and recommends that the Department for Work and Pensions “consider auto-enrolment in Universal Credit to guarantee income maximisation, reduce the personal burden of social security applications, and ensure everyone has a protected income floor”.
Inflation on essentials has been “much higher than the headline rate and those on low pay and social security have seen their incomes stagnate. Therefore, while this cost-of-living crisis has affected us all, it has affected those struggling in a far more brutal way.” This is borne out by ONS data, which shows that the lowest-income households experience a higher-than-average inflation rate.
Government data suggest that poverty rates have fallen since the late 1990s for children, pensioners, and working-age parents. The Resolution Foundation has forecast, however, that child poverty will reach its highest level since 1998 in 2027/28.
Last year, the Joseph Rowntree Foundation reported that approximately 3.8 million people, including about one million children, had experienced destitution in 2022. This was almost two-and-a-half times the overall number, and nearly triple the number of children, in 2017. The charity defines destitution as: “Lack of access to at least two of six items needed to meet your most basic physical needs to stay warm, dry, clean and fed (shelter, food, heating, lighting, clothing and footwear, and basic toiletries) because you cannot afford them” and “Extremely low or no income indicating that you cannot afford the items described above”.
The most common source of income for all destitute households was social-security benefits (72 per cent), prompting the charity to say that “the basic rate of social security is now so low it fails to clear the extremely low-income cash threshold set for destitution.” The threshold was set at £95 per week for a single adult, and £205 for a family of two adults and two children. The standard Universal Credit monthly rate is £393.45 for over-25s.
OECD figures suggest that the UK has some of the highest levels of income inequality in Europe. The Government has set up a ministerial task force to begin work on a Child Poverty Strategy, and made a manifesto commitment to “reviewing Universal Credit so that it makes work pay and tackles poverty”.