1.3m households would have been in poverty without cost of living payments

The DWP has published a new report reviewing the cost of living support and it’s impact on households with below average income.

The report showed that 1.3 million more people would have been in absolute poverty after housing costs in FYE 2023, a 2 percentage point increase, without the additional cost of living support provided.

Commenting on the report, Lauren Peel, Director of Consumer Insights at Fair4All Finance said “The positive impact of cost-of-living payments on low-income families highlights how millions of households are continuing to live on a financial knife-edge from day-to-day.

“Today’s report should remind us all that falling inflation is more a case of ‘less bad news’ than ‘good news’ for many households. Many working families are juggling everyday demands on their money with managing the cost of borrowing that’s helped them survive over the last 12 months. For the most financially vulnerable, the cost of living crisis has been playing out for years.

“Our own research* shows nearly two in three people feel they are struggling with debt, yet 82% of the population continue to keep their money worries to themselves. This year will continue to challenge many people’s budgeting to the limit, with many families still stretching to cover last year’s costs as well as today’s.

“The mental and emotional toll of financial vulnerability can be devasting, and it’s vital people know help is at hand. We know many people aren’t aware of community finance providers when they’re looking for options. Credit unions and community finance providers across the country are on hand to help people build saving habits or tackling everyday expenses, and provide access to other support such as debt advice.

“It’s crucial that anyone struggling seeks support from the community sector, or from debt advisers, rather than turning to loan sharks, illegal money lenders or spiralling into problem debt.”

Independent Age Chief Executive Joanna Elson said “UK Government figures released today show that poverty in later life continues to be a major issue that isn’t getting the attention it deserves. The older population is growing in the UK, and one in six pensioners are experiencing financial insecurity. In the sixth richest country in the world – there shouldn’t be almost 2 million older people living in poverty. 

“These statistics cover the height of the cost-of-living crisis, an immensely difficult period for everyone living in financial hardship, including those in later life. Our helpline received, and is still receiving, regular calls from scared and anxious people looking for support. We heard desperately sad accounts of people limiting themselves to just one meal a day, washing less to save on water, and avoiding meeting up with loved ones as they couldn’t even afford to buy a coffee.   

“The UK Government did help people during this time with cost-of living payments which may have kept some heads just above water, but up and down the country budgets were stretched to breaking point. We also know that too many older people missed out on this vital support as it was linked to Pension Credit, an entitlement with a concerningly low uptake of 63%. The latest figures show that up to 880,000 older people missed out on Pension Credit in 2021/22. Our own research revealed that increasing uptake of this financial entitlement would drastically reduce later life poverty, while improving people’s health and reducing pressure on the NHS. This is why the UK Government must introduce a strategy that outlines targeted plans to get this money into the pockets of those that need it most.  

“Energy prices have hopefully peaked, but household bills are still astronomically high, and many are about to rise further. More must be done to help shield older people living on a low income from future spikes in costs. The introduction of a single social tariff for both water and energy will protect people when future world events push up the price of essential utilities.  

“The number of older people in poverty has been steadily rising since 2012, long term-solutions are desperately needed to significantly reverse this alarming trend and prevent future surges of older people facing economic hardship. The UK Government must instigate a cross-party review to establish an adequate minimum level of income needed to avoid poverty in later life, alongside robust plans to get the existing financial support available to every older person who needs it.  
“Together, we can tackle pensioner poverty so that everyone has the opportunity to live with dignity, choice and purpose.”