Research by IPPR, the progressive policy think tank, finds that Income Crisis is widespread in the UK. 946,656 households are unable to cover the cost of two or more of their essential bills, representing three per cent of all households in the UK.
An Income Crisis is when a household is unable to pay two or more of their essential bills – their mortgage or rent, energy bills, water rates or council tax, at any one time. The majority of households who are in some level of Income Crisis have at least one adult in work (64%) and over half of these households contain children (53%). Additionally, households in Income Crisis are most commonly those who have little leeway when things go wrong. The vast majority of those found to be in Income Crisis were unable to save £10 or more per month (84%).
Most common was council tax, with more than half (58%) being unable to pay a bill. This was followed by energy and water bills, with around half of those in Income Crisis owing on their electricity (53%), gas (50%) and water (51%) bills. Rent and mortgage, while usually the largest outgoing a household faces, were much less commonly owed or in arrears.
Government support tends to focus on long term problems so often provides limited help with these moments of crisis. So support from charities and, in some cases, companies is increasingly important, for example in schemes like Foodbanks or now in Fuel Banks. For example Fuel Banks are supported by energy supplier npower, and provides two weeks’ worth of free gas or electricity for many Foodbank users with prepayment meters.
IPPR is calling for:
Darren Baxter, researcher at IPPR said: “Worries about paying the next food, utility or Council Tax bill are the daily reality for many households. And shockingly for nearly a million British families, these worries become an Income Crisis. Companies, including the utility companies, charities and the government can and should learn from the food and fuel banks that already exist, to do much more to help people facing Income Crisis.”