Millions of low-income families to 'face a crunch point' with bills rise in April

According to the TUC (Trades Union Congress), the number of workers on universal credit has increased by 1.3 million since the eve of the Covid-19 pandemic.

New analysis by the trade union of official figures shows that over 2.3 million working people were in receipt of the benefit at the end of 2021, compared to just over 1 million on the eve of the pandemic in February 2020. This represents an increase of 130 per cent over the last two years and means 1 in 14 working adults now claim universal credit.

However, the TUC says that the basic value of universal credit is now lower than at the start of the pandemic as a result of it not keeping up with inflation. It estimates that the value of the benefit has fallen by £12 a month in real terms when measured against CPI inflation and £21 a month when measured against RPI (Retail Price Index) inflation compared to just before the pandemic.

The trade union warns that things will only get worse in the months ahead with inflation forecast to rise further, leaving millions of low-paid families facing a crunch point in April when energy bills and national insurance contributions go up – at the same time as universal credit continues to fall in value.

A poll it carried out before the Government’s energy cap announcement and Bank of England forecasts found that many were already struggling to make ends meet, with parents of young children and key workers among those more likely to be struggling. One in eight workers said they will struggle to afford ‘the basics’ in the next six months.

The TUC is calling on the Government to do ‘far more’ to help struggling households including:

• Increase universal credit to 80 per cent of the real Living Wage.
• Introduce a windfall tax on energy companies, using the money to reduce household energy bills.
• Boost the minimum wage to at least £10 an hour now

'If ministers fail to do what is necessary, more households will be pushed below the breadline'

General secretary Frances O’Grady said, ‘The Government must do far more to help struggling families get through the tough times ahead. The support package announced by the Chancellor last week is woefully inadequate.’

Last week, the chancellor Rishi Sunak announced support to help families cover the cost-of-living, including council tax rebates and £200 loans, scheduled for October, to help families stay afloat. However, the TUC says the energy price cap package equates to just £7 extra a week for many, most of which will have to be repaid.

O’Grady went on to say, ‘Universal credit urgently needs boosting and we need further action to reduce fuel costs for those battling to make ends meet. 

‘If ministers fail to do what is necessary, more households will be pushed below the breadline.’

Save the Children said that parents were having to make ‘impossible’ choices between eating and heating their homes.

The charity’s director of UK impact Dan Paskins explained, ‘So far, the Government has failed to target enough support at the families who need it most. To get families through the cost-of-living crisis, and protect children from poverty, ministers must invest in the social security system to ensure that it provides families with enough to live on.’

More families ‘food insecure’

Separately, the Food Foundation has reported a continued rise in the number of households experiencing food insecurity.

New data released by the charity shows the percentage of ‘food insecure’ families has increased from 7.3 per cent of UK households to 8.8 per cent (4.7 million adults) in the past month.

Food insecurity is defined as experiencing one or more of the following:

• Having smaller meals than usual or skipping meals due to being unable to afford or get access to food.
• Being hungry but not eating due to being unable to afford or get access to food.
• Not eating for a whole day due to being unable to afford or get access to food

The data reveals a significant rise in the number of households with children experiencing food insecurity in the past month, with 2 million children now in households that do not have access to a healthy and affordable diet.

It also finds that people on universal credit are five times more likely to have experienced food insecurity in the past six months.

The Food Foundation is calling on the Government to make tackling food insecurity central to its levelling-up agenda.

Anna Taylor, executive director of The Food Foundation, said, ‘'The Levelling Up white paper commits to boosting productivity, pay and job security but does not commit to reducing food insecurity rates.  Food insecurity is a vital measure if we are to monitor severe material deprivation. If the Government wants to really get to grips with the issue, a comprehensive approach to levelling-up must tackle food insecurity head on.’

A Government spokesperson said, 'We know this has been a challenging time for many people, which is why we’re providing support worth around £12bn this financial year and next to help households with the cost of living, including putting an average of £1,000 more per year into the pockets of working families, and we have announced a further £9bn to protect against the impact of rising global energy prices.

'Our £500m Household Support Fund is also giving more help to the most vulnerable with essential costs such as food this winter, and our Holiday Activities and Food programme is providing healthy food and enriching activities to disadvantaged children during major school holidays.'