Cost of living crisis: Triple blow to earnings leaves some low-income families £1,600 worse off, even after govt support | UK News

Some families have lost up to £1,600 a year because of the cost of living crisis – even with government help taken into account.

The poorest people in society are suffering three major hits to their incomes in the year to October 2022, according to a report commissioned by former prime minister Gordon Brown.

Apart from losing the £20 a week gain to Universal Credit, the gains have not kept pace with inflation – and the energy price cap is expected to rise this autumn.

Former Prime Minister Gordon Brown
Gordon Brown

Poverty expert Professor Donald Hirsch, who wrote the report, said the government’s package of measures did not meet the needs of low-income households – and urgent action was needed. .

His research found that an out-of-work couple with two children would lose £1,300 a year, with larger households suffering bigger losses.

That’s despite working-age households using Universal Credit and other tried-and-tested benefits getting an extra £1,200 in help – including reduced energy bills and social taxes. dong, as well as £650 directly into their bank account.

The report warns this fixed-rate approach is detrimental to larger families, and Mr Brown said: “We are facing a humanitarian crisis like the UK has never seen in a year. many decade.

“As the cost of living continues to soar, families on the brink of making a living are unable to bridge the gap.”

He also called on the next prime minister to “make sure that families have enough to survive this crisis and beyond”.

And writing in The Observer, the former Prime Minister warned that failure to act risks “leaving millions of vulnerable and innocent children and pensioners through a winter of catastrophic poverty.” .

Mr Brown is urging Boris Johnson, Rishi Sunak and Liz Truss to agree an emergency budget this week – and says time is running out to update the Universal Credit payment system before the next energy price ceiling hike .

Emphasizing the urgency of the matter, he also suggested that parliament should be reconvened if it failed to do so.

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Britons warn worse to come

‘Living in survival mode’

The report has been endorsed by 56 charities, faith groups and politicians – and also includes first-hand experiences of those affected by the price increases bills.

One of them was Lowri, who received Universal Credit and cared for her father and son. Her food and gas bills have doubled, and she has had to sell her daughter’s bicycle to make a living.

She said: “I’ve spent the past 5 years living in survival mode, just surviving every day, worrying about money all the time. I’m mentally and emotionally drained from living like this. .

“It’s not living, merely existing. There’s no way people can manage to pay all their bills, and all we’re doing is existing to pay. bills. Horror is an overstatement.”

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The expected shortfall in the report is based on figures drawn at the end of 2022 and there are concerns that families will find themselves in an even worse financial situation as Ofgem, the regulator energy, made an announcement regarding the increase in the energy price ceiling.

A government spokesman said: “We understand that people are struggling with rising prices which is why we have taken action to protect the eight million most vulnerable British families. through a direct payment of at least £1,200 this year, with additional support for pensioners and disability claimants.

“Through our £37 billion support package, we are also saving the typical employee more than £330 a year through tax cuts in July, allowing Full Credit users to asked to keep an extra £1,000 of their earnings and cut fuel tax by 5p, saving a typical family £100.”

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