Food, finances, and frustration

The inadequate support from Universal Credit, combined with soaring food inflation, has created a new normal for lower-income households, characterised by a persistent hardship to live comfortably.

Faced with record food inflation, soaring energy bills and inadequate Universal Credit support, those on the lowest incomes are being forced into making impossible choices, often having to decide between heating and eating.

Our recent survey in collaboration with the Joseph Rowntree Foundation (JRF) found that millions of low-income households continue to go without vital items such as food, heating, and basic toiletries; with 87% of those surveyed having gone without at least one essential in over a year.

Meanwhile, millions of households are cutting down or even skipping meals entirely due to a lack of money for food.

Despite the UK Government’s cost-of-living payments to provide support, 54% of households relying on Universal Credit have gone without three or more essential items, and more than two-thirds have been compelled to alter their food choices, often resorting to less nutritious options.

The emergence of a “horrendous new normal”

Ahead of the latest inflation figures, the Consumer Price Index (CPI) has witnessed an alarming 18% surge in prices over the past two years, with energy prices rising by 110% over the same period. This, along with inadequate fiscal assistance from Universal Credit, has perpetuated a relentless cycle of hardship for those on the lowest incomes, who have little in reserve to cope.

Despite earnings and benefits rising by 13% and 14% respectively – almost a third (31%) of low-income households surveyed had less than £200 in savings.

Over the past year, the number of these households lacking essentials, going hungry, and falling into arrears has remained unchanged, with this ongoing stagnation expected to have long-lasting repercussions on family life, finances, and health.

And the situation has shown no signs of improvement, with the Government’s £900-a-year payments, which are paid in three £300 instalments, providing only short-lived respite for poorer households struggling to afford everyday basics from food to shampoo.

Food insecurity

Food inflation has reached record levels, surpassing energy prices as a major contributor to overall inflation. During the survey, millions of low-income households (23%) experienced a poor diet due to the cost-of-living crisis, resorting to less nutritious meals.

Alarmingly, more than four in ten low-income households on Universal Credit suffered from a poor diet.

More than two-thirds (69%) changed the type of food they bought, for example buying less fresh produce, and 68% have also cut back on food for adults. Indicating the effects of the increased cost of living now on people’s physical health as well as mental health.

A tough road ahead

The inadequate support from Universal Credit, combined with soaring food inflation, has created a new normal for lower-income households, characterised by a persistent hardship to live comfortably.

Speaking on the findings, JRF senior economist, Rachel Earwaker, said “[Inflation] places a huge burden on families in the here and now, but we need to get real that this is a hardship crisis that won’t end as inflation starts to fall. Higher prices will remain baked in, and cost of living payments, while necessary, are not even providing breathing space for people who desperately need it.”

The UK Government remain acutely aware of the need for further intervention, rolling out a £94bn cost of living support package worth around £3,300 per household, as well as raising benefits, including Universal Credit, by 10.1% and helping families with essential costs through the household support fund.

Whilst a big step in the right direction, non-profits such as JRF and The Trussell Trust have called for the implementation of an Essentials Guarantee, to ensure that, at a minimum, the basic rate of Universal Credit at least covers life’s essentials, and that support can never be pulled below that level.

Savanta surveyed 4,004 UK adults aged 18+ in households in the lowest 40% of equivalised household income online between 3-18 May 2023. Data were weighted to be representative by age, gender, region, ethnicity and housing tenure. Savanta is a member of the British Polling Council and abides by its rules.

To discover more about how the living crisis is affecting your market or wider society as a whole, please get in touch.

Further reading:

• The importance of mental health charities in times of crisis
• From cash flow to crisis: What London businesses are saying about rising costs
• Despite the ongoing cost of living crisis, business confidence increases significantly