Nearly half of people who say they are struggling to deal with the cost-of-living crisis have reported that they have no money to live on each week after paying all of their bills.
Forty-seven per cent of respondents – increasing to 49 per cent for families with children – to a survey from poverty charity Turn2Us said they had nothing left after paying housing costs, council tax and utility bills.
The respondents to the survey, comprising 2,730 users of the charity’s services, said that their weekly food shop bill of £75 (£93 per week for families with children) pushed them into debt.
This week, the first instalment of former chancellor – and potential prime minister – Rishi Sunak’s cost-of-living support payments will be made, where those on Universal Credit will receive £326 (of a £650 total) to help deal with living costs, amid rising inflation and energy bills.
But more than a quarter (26 per cent) of survey respondents said that they plan to use the payment to deal with existing debt, such as on a credit card, while over half (52 per cent) planned to use it specifically to pay for current utility bill arrears, leaving them exposed to future energy price rises.
“We are getting close… to a position of civil disobedience,” where people may refuse to pay their bills, money-saving expert Martin Lewis told Newsnight on the evening Boris Johnson resigned as Prime Minister. “You cannot spend too long on this [Johnson issue]: we have a genuine catastrophic crisis hitting ten million people potentially moving into severe levels of poverty.”
When the second lump sum of the £650 cost-of-living support payment comes in the autumn, it could be met with higher than anticipated spikes in energy costs: Lewis tweeted predictions that the cost cap could go up by 64 per cent in October, and by an additional 4 per cent in January 2023. Turn2Us expects the financial boost given to those in receipt of the cost-of-living support payments to be used up in less than five weeks.
From 14 July through the rest of the month (payments are being spread out due to “significant demand”), the first instalment of the cost-of-living payments will automatically make its way to people on Universal Credit, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit, and Pension Credit.
But worries persist over whether what has been pledged will go far enough.
Joanna Burridge, a beneficiary of Turn2Us’s services, told Spotlight of how her payment will be used to pay off debts she amassed in light of recent hikes in energy costs. “The money that’s coming through in the cost-of-living support is basically only clearing off a deficit as opposed to actually being there for me to spend on future bills,” she said.
Recently separated from her husband, Burridge, 52, from Somerset, previously worked across local government, housing and education, but had to stop working altogether in June, with her health deteriorating in recent years after being diagnosed with leukaemia in 2010. “I’ve had lots of problems with my Universal Credit claim over the years, and that has meant it’s been very difficult – finances have been very tight,” she said.
The squeeze on finances has seen Burridge solicit advice and funding support from charities and use a local pantry, which, for around £3.50 per week, gives her ingredients to cook for herself and her 18-year-old son. Though Burridge welcomes the support payments, she believes there is not enough support or consideration for those with disabilities or long-term illnesses: “I’m at home a lot, and because I feel the cold a lot because of the effects of [my] treatment, I would need to use the heating more than some people would do.
“Again, that’s an additional cost, [just] because I’m somebody living with cancer who’s on chemotherapy. I can’t do anything to increase my income… I can’t say ‘I’ll work overtime’ or do anything else because I’m not well enough to, and it feels really quite difficult to admit,” Burridge added, pointing to negative societal stereotypes towards people receiving state support.
Uncertainty looms over how the cost-of-living crisis will be addressed over the next few months.
The current picture, particularly for children, is concerning: figures released this week by the End Child Poverty coalition reveal that 3.6 million children live in poverty across the UK – with rates in the north-east (which has overtaken London as the child poverty hotspot for the first time) and Wales increasing for at least the past two years.
The longlist of candidates for the role of Conservative leader, and future prime minister, have mostly been quiet about their plans to tackle the current crisis. Last week, as a cross-party coalition on poverty was established, its chair, Tory peer Philippa Stroud, noted that the “poverty levels of this country are too high and the government doesn’t have a strategic approach” to tackling it.
Commenting in response to the latest child poverty figures, Jonathan Ashworth, the shadow welfare secretary, warned that “desperation facing families is set to worsen” across the board. “Instead of offering solutions, a parade of Tory leadership candidates are promising billions in unfunded tax cuts that risk deep, swingeing cuts to Universal Credit, pushing even more children into poverty,” he added.
[See also: The death of “Boris” the clown]