Cost of living is rising - hitting poorest hardest

A charity has revealed 3.8 million low income households are in arrears with household bills.

According to the Joseph Rowntree Foundation (JRT) around 950,000 are thought to be in rent arrears, 1.4 million are behind on council tax bills and 1.4 million are behind on electricity and gas bills. The charity has said its findings show clear signs that the pandemic has dragged families that were previously just about managing into arrears on essential bills.

Its findings suggest that a third (33%) of low-income households are now in arrears - triple the 11% estimated by a similar study before the coronavirus pandemic, JRF said.

Working age households on low incomes, including those aged 18 to 64, were found to have been particularly hard hit, with 44% thought to be in arrears.

The charity said families with children; households in London; households where the person surveyed was aged under 45, and black, Asian and ethnically diverse households were particularly likely to have been pulled into arrears.

A large majority of households (87%) who are behind on their household bills said that they were always or often able to pay all their bills in full and on time before the pandemic hit.

Even before recent energy price rises began to bite, six in 10 households on low incomes (62%) reported that their costs increased during the pandemic, the report said.

Katie Schmuecker, deputy director for policy and partnerships at the JRF, said: "There is a debt crisis hanging over millions of families on low incomes.

"Behind these figures are parents gripped by anxiety, wondering how they will put food on their children's plates and pay the gas bill; young people forced to rely on friends to help cover their rent and avoid eviction.

"While many households on higher incomes have enjoyed increased savings and rising house prices during the pandemic, people on low incomes are under serious financial pressure that shows no sign of abating."

Alison Garnham, chief executive of Child Poverty Action Group, said: "These findings are a storm warning. Millions of families look very precarious as we sail into even rougher seas with costs and household debt rising."

She added: "Real investment in children and their families will also require restoring the value of children's benefits, more help with childcare costs and an expansion of extended schools."

A Department for Work and Pensions spokesperson said: "We know the best route towards financial independence is through well-paid work, which is why our multibillion-pound Plan for Jobs is helping boost skills and opportunity, while Universal Credit continues to provide a vital safety net for millions.

"The Household Support Fund is helping the most vulnerable with essential costs through this winter, and is distributed by councils, who are best placed to ensure those in need in their local areas can be identified and supported as soon as possible."